What should you know?
Cast your mind back to the year 2000, Britney Spears was number one, Enron was just another energy company, everyone had a Nokia phone in their pocket, and Apple was a mediocre computer manufacturer.
Fast forward to today, and the world is a very different place. Three of the above have imploded or disappeared into insignificance, one has become the biggest company of all time.
How many would have predicted that outcome back in the year 2000?
The chart below shows how the ranking of the 20 Most Valuable U.S. Public Companies has changed from 2000 to today:
Why should you care?
As humans, we can be swayed by our emotions and when these take over our investing brain, it can lead to expensive mistakes.
None of us know what the future holds so trying to time the markets is futile. Markets move in response to an unfathomable number of ever-changing variables and sentiment can swing in a heartbeat.
The only thing we know for certain is that investing in a globally diversified portfolio of the best companies in the world has a strong and lengthy track record of delivering long term, inflation-beating returns.
The only surefire way to realize all the gains that the stock market offers is to control your emotions and stay invested for the long term.
Remember: a permanent loss from investing in the stock market is a purely human achievement and is ALWAYS a result of investor behaviour.
