Investing for the New Year: Do This, Not That

You can’t save your way to retirement. The money you set aside has to be invested — not stashed in a savings account where you’ll be lucky to earn a 2% interest rate. In other words, you’ll have to learn to live with the uncertainty the stock market loves to dish out.

Priya Malani, co-founder and CEO of Stash Wealth, a financial planning and advising firm for millennials, says it’s easy to get sucked into news headlines about recessions, market pull-backs and potential economic devastation. Try to temper your reactions by remembering, as Malani says: “Emotions and investing do not mix.”

Malani’s biggest tip for investing in 2023? Don’t panic. “The market’s worst days have a tendency to be closely followed by its best days,” she says. “That means those investors who panic sell likely end up missing out on incredibly high-performing market days.”
 
Stay the course so you can take advantage of them.
 
Need more proof to help you weather the bad days? The chart below from JPMorgan Wealth Management shows what happened to investors who missed the 10 single best days in markets over the last two decades. And note that over that time, seven of those best days happened within about two weeks of the 10 worst days.

For more, read our investing editor Mallika Mitra’s story with five investing tips for 2023.

— Jill Cornfield, deputy editor

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