Long term investing only works if you can live without that money for 5 or 10 years or more

This is because the market has it's ups and downs and you don't want to sell your stocks usually when they drop a lot. So, you should hold onto your stocks while there are recessions or even depressions. So, for example, if you were invested in 2009 in the Stock market it dropped all the way to ( The DJIA hit a low on March 6, 2009 of 6,469.95.)

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United States bear market of 2007–2009 - Wikipedia

Wikipedia

https://en.wikipedia.org › wiki › United_States_bear_mar...

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So, people who were invested who had to sell because they couldn't wait for the market to recover lost sometimes almost everything. However, people who held their stocks from about 2009 to 2012 or 2014 at least were okay.

 

So, the point is it is important only to invest money that you can live without while large market changes happen. You have to wait until things recover (which was several years from 2009 until 2012 or 2014 until you could sell and make a profit on your stocks. Also, if you are invested in Blue Chip stocks with dividends the dividends make it worth your risk to own those stocks most of the time. 

Note:

If you live in California there is another potential problem to be aware of. Yes the Federal Capital Gains Tax is 20%. However, if you live in California they add another 10% tax for the state.

So, if you sell your stocks for cash you are going to pay 30% taxes on that sale which makes people often NOT SELL THEIR STOCKS IN CALIFORNIA once they are invested. However, if you are in Blue Chip Stocks you also can collect Dividends the rest of your life and either spend it or reinvest it in your portfolio too. So, there are many ways to look at this.