The numbers you see above are the amount that each of these are down since reaching their all time highs over the last year. As you can see, speculators are WAY worse off than investors in the current market decline. Can you imagine a 99% drop?!

Investors know that ups and downs in the market are all part of the process. That’s why they use low cost, diversified index funds to build wealth slowly but surely. On the other hand, speculators guess what is going to happen in the short term and try to place trades based on those guesses. And as you may know, guessing correctly is very very difficult.

We hear a lot about people who have become millionaires thanks to Bitcoin, meme stocks, NFTs, etc, but there are MANY MORE people who have lost massive amounts of money from trying to play the game. Warren Buffett once said, “Only when the tide goes out do you know who’s swimming naked.” This means that during times of market stress, like there is now, speculators who were chasing returns get exposed as they lose a significant amount of money.

Don’t be a speculator. Be an investor who is on a mission to steadily increase their wealth by buying and holding index funds, regardless of what the market is doing.

As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.

-Vivi & Shane

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