I'm new to investing and I've heard investors saying that the market always goes up, so in the long term, everybody is going to win. Is it true, if so then why doesn't everybody invest and get rich?

  • 1
    (1) Index funds implement the idea of investing into the market, and have become the preferred instrument for long-term investment. (2) Poverty is a thing, and not everyone can invest meaningful sums – investment amplifies inequality, the rich get richer faster. (3) Consider the communist perspective: these above-inflation returns are only possible because someone is paid less than the true value of their work, i.e. is being exploited. If everyone held an equal share that would fix the injustice – but you'd no longer see those returns. (4) The last centuries saw unsustainable economic growth.
    – amon
    Oct 27, 2019 at 19:07
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    Also while the market tends to go up over the long-term it can see dramatic falls over the short-term. Someone who can’t afford to be temporarily broke (either because they have insufficient savings or an uncertain career or no current source of income e.g. retirees etc...) may not want to tie their money up in investments.
    – Dugan
    Oct 27, 2019 at 19:14
  • Also, if you don’t have the right mindset— I.e. you panic when the market takes a dive— then the stock market is a great place to lose money.
    – Dugan
    Oct 27, 2019 at 19:15
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    @amon - I’d encourage you to post that comment as an answer. Oct 28, 2019 at 0:57

7 Answers 7


For starters, not everyone has the money to invest because they live paycheck to paycheck so everybody isn't going to win nor are they going to get rich.

Even those with a decent middle class income face obstacles. How much money is available to invest when you face some of these?

  • paying off large college loans

  • a mortgage on a house

  • the cost per child to raise is approaching $240k (more if you take on college)

So let's say that the average Joe Taxpayer gets a handle on these large expenditures and the day comes that there is some money to invest. How many years did it take to get to that point? The longer it took, the less years one has to compound the return.

There's also a timing risk, not because you were timing the market but because of the time at which you began investing. Over the past 25 years, the annual return for the SPY with dividend reinvestment was about 9%. The net return might have been even less due to taxation of dividends and taxes on capital gains if they were realized. But had you begun investing 20 years ago, the annual return since then was only 5.60% pre tax. For an out of context slice, the SPY returned only 0.65% for the Lost Decade between 2000 and 2009. Timing is everything.

Now 9% a year for the past 25 years is nothing to sneeze at. $10k became $81k. I'm no accounting whiz - my rough guess at the result of investing $10k every year for 25 years ($250k) would be about $925k. That does not take into account the effect of 2+ pct inflation over the past 25 years nor does it account for being able to save more as expenses wane (house paid off, kids grown up, etc.). In this hypothetical, $250k grew to $925k. That's sweet, but are you rich?

  • +1 I like how you used "the average Joe Taxpayer..." in your sentence as a subtle hint for average taxpaying people.
    – some_coder
    Oct 29, 2019 at 8:12
  • "are you rich" ? yes.... probably. Because you could afford saving $10k every year, not because of the result of that.
    – xyious
    Oct 30, 2019 at 15:51

As others have mentioned, many people don't have the spare cash to invest. Leaving that aside...

The market isn't constantly going up. Sometimes it goes up rapidly, sometimes it goes down. Anyone investing in the short-term, or anyone who is risk-averse may want to avoid volatile investments. The growth only averages out over several years.

"The market" is a collection of everything that is being traded on whatever market you are talking about. Most people don't have enough money to buy a bit of everything. Just buying some stocks gives more risk than the market as a whole. The companies you invested in could lose money or even go bust.

You could buy into a fund that invests in a wide range of things. That gives you a better risk profile, but funds charge fees. Those fees come out of your profits. Unless the market grows faster than the fees, you lose money.

Finally, "goes up" is vague. Say you invest $1000. After a year, it's gone up to $1050. That's not rich yet. After 10 years, with compounding, it might be $1630. Still not rich. Especially when you allow for inflation. After 20 years, it could be $2650. That's nice growth. But still not exactly rich.


It isn't true. Investing in stocks and shares (if that is what you mean) always brings some risk of losing money, particularly in the shorter term.

The returns are positive on average over the long term - because that is the quid pro quo for providing companies with use of your money. This return has to considered in the light of inflation, what would eat away the value of your investment and in the light of the returns you could get from investing in lower risk investments such as a bank savings account.

But individual shares can and do rise or fall significantly depending on the fortures of the company and of the industry it is in. Even a balanced mixture of the stocks on the market ('the Index', such as the FTSE100 or S&P) can go up and down considerably.

For example, here is an graph of the UK FTSE100 over 30 years (blue line is inflation adjusted):

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30 Years of the FTSE

If you want to start investing in mainstream shares I would suggest:

(1) Practice a bit with an imaginary portfolio (pick a imagined pile of cash to invest that is aspirational but not silly). Don't forget to look at the costs you will incur for trading from a brokerage account. Keep track of how you do.

(2) Open an account with one of the mainstream consumer brokerage firms - you can do a bit of research. Look at the range of investments you can make through them, the transaction costs they charge, and the information and research tools available through their platform. (Some of them also let you set up a dummy portfolio using pretend money alongside your real account, so you can experiment as a I suggested above)

(3) Invest only money you can cope with losing if things go badly. And make sure you have some basic "rainy day" savings in a savings account before you put additional moeny into equities.


There is some truth to this claim but a lot of factors aren't taken into account.

Markets may "go up" continuously over a long period of time but market corrections and crashes do happen. While this doesn't change the previous "fact", the timing maybe such that you need to sell for liquidities at that same time. This would materialize part or all of the loss without possibility to regain.

On another note, there are various reasons why people do not invest; for example, lack of money or financial education come to mind. Also, getting "rich" is unlikely from simply investing a few dollars from time to time given that typical yearly returns are in the single digits.

  • Then how do investors become rich?
    – iamsumitd
    Oct 27, 2019 at 19:44
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    @iamsumitd By spending a lot of time and effort into studying and predicting the development of individual stocks and thus having a slightly better idea when to buy and when to sell which financial instrument than the average person. Also, keep survivorship bias in mind. You hear a lot about those investors which got rich, but not so much about those who bought the wrong financial instruments at the wrong time and lost everything. Investors who aim for high short-term gain essentially play roulette.
    – Philipp
    Oct 28, 2019 at 9:31
  • @iamsumitd by being a-bit-less-rich through other means in the first place.
    – ApplePie
    Oct 30, 2019 at 0:25
  • Investors become rich by investing consistently over a long time. If you're at the median income (in the US) and you save 10% of your income in your 401k for 40 years you'll be a millionaire (at average market returns). People just don't talk about the 40 years it takes because no one wants to hear it.
    – xyious
    Oct 30, 2019 at 15:54
  • @xyious millionaire as your retirement savings is not really what I would call rich.
    – ApplePie
    Nov 3, 2019 at 20:35

Well, hold a Micro Russell 2000 future with four-times margin deposit of $1432 and see how long the position survives. Of course roll the position into the next contract when near each expiration.

Now the current economic forecast is threat of deflation and recession. So the market could dip-down in 2020. The difficulty of surviving the dip is why many investors don't hold-on.


Claiming the market always goes up demonstrates lack of understanding how markets works.

Markets constantly change, often reflecting human sentiments, whether sentiments accurate or not.

Viewing how markets perform, is what happened in the last minute, hour, day, week, month, year, decade... it does not tell you what will happen in next minute, hour, day, week, month, year, decade...

Each forms an opinion of what might happen... with some better at this than others.

Some like self Invest and Trade shares, with aim of generating income.

To learn about stock markets, self recommends you just select less than five stocks (example company such as your own bank, insurance, or other business you regularly deal with) then watch each of their daily price changes.

For each company of interest, view and learn to read trends appearing on their charts.

After three months of chart viewing you may find some opportunities.

Every investment or trade has its own risk, as does walking down the street...

BTW self nearly broke a few times, yet still enjoy also am better off with my trading ;-))



Phrasing a couple of other answers in a more realistic way, a large part of the reason is because a lot of people prefer to spend money (and borrow money) so that they can have immediate luxuries.

Of course there are a subset of people who just don't make enough money that they have much left after paying for basic necessities. Leaving those aside, though, there are plenty of people who do make enough that they could invest, they just consider other things to be more important.

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