But, here's the problem. You don't invest money that you might need for some emergency like a down payment for a house or a down payment for a car or even cash to buy a car.
So, the trick with investing in the stock market is to invest in blue chip stocks long term that pay dividends. The dividends are necessary to be able to afford the risk of investing in the first place.
But, if the money you invest you might need for something else like food or rent or paying off a mortgage or buying a car or something then you shouldn't be investing that money in stocks (equities) to begin with.
So, the real problem here with the stock market is knowing what money you can invest and then when there are downturns leaving everything where it is for 5 or 10 years if necessary for the stock market to recover.
If you look at the crash of 2009:
By March 9, 2009, the Dow had fallen to 6440, a percentage decline exceeding the pace of the market's fall during the Great Depression and a level which the index had last seen in 1996. On March 10, 2009, a countertrend bear market rally began, taking the Dow up to 8500 by May 6, 2009.
And if you then rode your investments all the way up to 2022:
The Dow Jones Industrial Average, also known as the Dow or DJIA, tracks 30 well-known, large companies that trade on the New York Stock Exchange (NYSE) and Nasdaq. As of early 2022, the Dow's all-time high at market close stands at 36,799.65 points—reached on Jan. 4, 2022.
Then you begin to see how billionaires get made.
Because if you held on through the crash of 2009 up until now you have seen your investments grow to around 6 times as much during that time. This is how millionaires and billionaires get made by timing their investments and waiting out the downturns without cashing out when things are low.
If you are wondering why people become millionaires or billionaires it's all about choosing dividend bearing stocks and timing your investments and planning and studying the markets.
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