What Warren Buffett Can Teach Us About Time in the Market
Over $100 billion later, some would venture to say that Warren Buffett is good at investing. One of the most impressive things about his success is that it didn't take some never-seen-before, innovative strategy. His strategy is quite simple, and he's never shied away from sharing it with the world: Look for undervalued stocks and trust the power of time.
Warren Buffett is a huge preacher of a buy-and-hold investment strategy because he understands the power of time and compound earnings, calling it "an investor's best friend." Compound earnings occur when the money you make on your investments begins to make money on itself, and it's the phenomenon behind most people's wealth. Imagine you invest $1,000 and earn 10% yearly interest. In the first year, you'll earn $100. If you reinvest the $100, now you'll earn 10% on $1,100. The next year, you'll be earning 10% on $1,210. And so forth.
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Source Fool.com
