When it comes to investing, most people picture the frenzy of the stock market: flashing headlines, daily price swings, and the latest predictions on economic cycles. The media portrays investing as an action-packed endeavor, where smart investors must stay glued to every shift and development. But in reality, successful investing is far removed from this hype.
Jack Bogle, the founder of Vanguard and a pioneer of index investing, once wrote: “The stock market is a giant distraction from the business of investing.” He pointed out that successful investing isn’t about predicting markets — it’s about enjoying the returns generated by real businesses over time.
Yet when most people think of investing, they picture the stock market — daily price changes, bulls and bears, the media hype of gains and losses, and the drama of economic cycles. But in reality, successful investing is far from the headlines that are meant to catch viewer’s attention above all else promoted in the media.
Financial news outlets thrive on drama. To keep readers and viewers engaged, they magnify every market shift, every earnings report, and every headline. It creates the impression that smart investors are those who are glued to the market, reacting to every twist and turn. And this makes sense if you step back and think about what business they are in – action sells and gets people overly engaged in following the topic du jour.
Also keep in mind that CNBC and the like view the market one day at a time. They provide information for traders, not necessarily investors–an important distinction. Traders buy and sell securities in short periods of time seeking a profit, while investors are in it for the long term.
Trying to apply the news that flashes across the TV screen about a stock or the market in general isn’t meant for the long term investor - it is meant for traders who make a living off of short term swings in market value or speculating on the outcome of upcoming events (will the Fed raise rates? will ABC Co hit earnings this quarter?, etc).
Real, effective investing is actually quiet. It’s about tuning out that noise and focusing on long term fundamentals: maintaining an appropriate level of risk in relation to your financial goals,, keeping costs low, managing taxes, and diversifying effectively. It’s a discipline of ignoring distractions, not chasing them.
In other words, investing should be seen as a way to share in the profits of capitalism. When you invest, you own a piece of companies that generate profits and distribute them back to shareholders, often as dividends. The value of these shares moves up and down based on the market’s expectations of future profits. That’s what creates the constant fluctuations in share prices.
Yes, the stock market can be volatile in the short term, and sensational headlines can make it seem chaotic. But rational investors take a long-term perspective, recognizing that short-term volatility is just noise. They understand that over the long run, human enterprise and innovation are resilient. Even with risks on the horizon — from geopolitical threats to economic challenges — the demand for goods and services will continue, and companies will find ways to turn a profit.
To put this in perspective, let’s look at the past 100 years of market history, and how it has performed over different time periods:
Each time we stretch out the time period we’re viewing, we see fewer periods of negative returns and proportionally larger periods of positive returns.
Said differently, 100 years of market history tells us it pays to be patient and maintain a long term investment approach.
Of course, there are plenty of third parties — fund managers, brokers, investment platforms, and the like — who would like a cut of your returns. Their fees add up, reducing your share of the profits and often with little benefit to show for it.
Warren Buffett illustrated this concept well in a story he shared in his 2006 letter to Berkshire Hathaway shareholders. He describes a fictional “Gotrocks” family, who collectively own all of corporate America and enjoy its full profits. Then, along come a group Buffett calls “the Helpers” who offer to help some members of the family outperform the others — “for a fee, of course.” Over time, the Helpers multiply, charging more fees and further slicing up the family’s returns. Ultimately, while the Gotrocks family still owns the same businesses, they’re left with less and less of the profits because the Helpers have taken a share for themselves.
Buffett’s point is clear: in investing, there are too many “Helpers” who add little value but take a cut of the profits. By avoiding the unnecessary fees and complexity that come with active management, you keep more of your returns. Investing doesn’t have to be complex.
At WealthFactor, we believe in keeping things straightforward and transparent. We’ve cut out the unnecessary layers, removed costly intermediaries, and focused on strategies proven to work over the long term. Our approach is about minimizing fees and avoiding the traps of high-cost active management. With personalized indexing and evidence-based investment strategies, we help clients achieve optimal risk-adjusted returns without the distraction of trying to outsmart the market.
So go ahead — claim your rightful share of global capitalism’s profits. Invest with the long term in mind, ignore the market noise, and steer clear of the costly “Helpers” that drain returns. Real wealth building isn’t about constant market watching or rapid trading; it’s about disciplined, low-cost investing that allows you to benefit from the resilience of capitalism over time.
At WealthFactor, we believe in a straightforward approach to investing that prioritizes long-term success over short-term noise. By focusing on evidence-based strategies and keeping costs low, we help you retain more of your returns while staying committed to your financial goals. Investing doesn’t have to be complex; it just has to be intentional and disciplined. If you’re ready to explore how this approach can work for you, schedule a conversation with us — let’s build lasting wealth together by focusing on what truly matters.
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