Free for 90 days: Sign up now and get 90 days managed free after your first deposit. See offer details

<title>Dismiss</title>
Financial Goals

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 1, 2012

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.

Recommended Content

View All Resources
Displaying Performance to Shape Better Investor Behavior

Displaying Performance to Shape Better Investor Behavior

Understanding your accounts’ performance can feel complicated. We’re advancing how we display performance to help answer your questions and make stronger investment decisions.

How to Prioritize Your Financial Goals

How to Prioritize Your Financial Goals

If you identify all your financial goals for investing, you’ll likely find you can’t fund them all at once. Get our expert view on how to start prioritizing them.

How to Roll Over Your 401(k) to Betterment

How to Roll Over Your 401(k) to Betterment

Betterment makes rolling over your 401(k) simple and efficient. Get started online, or with a rollover concierge.

Explore your first goal

Safety Net

This is a great place to start—an emergency fund for life's unplanned hiccups. A safety net is a conservative portfolio.

Retirement

Whether it's a long way off or just around the corner, we'll help you save for the retirement you deserve.

General Investing

If you want to invest and build wealth over time, then this is the goal for you. This is an excellent goal type for unknown future needs or money you plan to pass to future generations.

Smart Saver

You could earn 20X more than a typical savings account with our low-risk investing account for your extra cash.

How would you like to get started?

Your first step toward a smarter investing future starts here.

Create a Betterment account

Go ahead and join the smart, modern way to invest.

See what we can do for you

Tell us a bit about yourself, and we'll show you the benefits of investing with us.

Get a free investing checkup

Help us get a sense of your investing approach and see how you could improve.

Transfer a 401(k) or an IRA

Move an existing retirement account into a Betterment IRA.

Download the mobile app

Enjoy the Betterment experience anywhere on the go.

<title>Close</title>

Search our site

For more information and disclosures about the Betterment Resource Center, click here. | See our contributors.