Earn Rewards: Sign up now and earn a special reward after your first deposit. See offer details

Now available: New and improved Socially Responsible Investing portfolios. Learn more

<title>Dismiss</title>

Betterment

Save, invest, retire

GET — On the App Store

View
<title>Dismiss</title>
Loading

Why Time Matters in Investing

Don’t you love the cheesy, old-couple-walking-along-the-beach shots you see in the ads for many retirement funds? They are sweet, and they look so happy, but they make me think fondly of my grandparents – not about revving up my retirement savings.

Articles by Betterment Editors
By the Editorial Staff Betterment Resource Center Published May. 01, 2012
Published May. 01, 2012
1 min read
We recently discussed the strategy for increasing motivation to save. Studies have shown, that if you can picture your future-self, it’s easier to increase savings. The researchers behind the study are hoping that people will start to focus more on long-term thinking, rather than the immediate gratification we’ve come to expect.

I love when new customers tweet us excitedly: “My @Betterment account has already doubled the returns I was seeing in my savings account!”… but I try to remind them that the timing is too short to give any real indication of the account’s performance (I know, I know. What a drag).

I can’t say it enough –

Time is incredibly important in investing.

Last week, Matt Krantz from USA Today wrote about a common investing conundrum: why did a certain company’s stock price fall, even though it reported stronger earnings than anticipated? This is surprisingly common, because there are many factors influencing price in the short-term.

Investor sentiment (and subsequent actions) plays a huge role in shifting stock prices. Company announcements, economic data, earnings estimates, inflation, exchange rates, world events, and hype around a hot company are all factors that can drive a stock up or down.

A company’s earnings, growth and cash flow will ultimately guide its stock price, but it’s important to remember the influence of external factors. Stalking the stock market can be fun, but set-and-forget is a much better approach for gaining long-term returns.

This article is part of
Original content by Betterment

Recommended Content

View article library

About Betterment | On Money and the Pursuit of Happiness

Our mission is to provide the best possible answer to the question, "What should I do with my money?" From the cash you spend today to the money you save for tomorrow and beyond, your money is a connection to the things you want and the life you want to live.

Goal-Based Investing: A Decade In Review

As we all look forward to and plan for the future, let’s stop and take a look at the past decade to see what we can learn from it.

Betterment Checking

Betterment Checking is our mobile-first checking account and debit card for your daily spending.

How would you like to get started?

Manage spending with Checking

Checking with a Visa® debit card for your daily spending.

Save cash and earn interest

Grow your cash savings for general use for upcoming expenses.

Invest for a long-term goal

Build wealth or plan for your next big purchase.

Invest for retirement

Set up traditional, Roth, or SEP IRAs to save for the golden years.

See details and disclosure for Betterment's articles and FAQs.