At a glance:
This past year has brought renewed interest in a variety of activities. For some, it was baking sourdough bread. For others, it was investing in equity markets. Investors opened more than 10 million new brokerage accounts (10 million!) in 2020*—more than any other year. Some of the factors that led to this investing boom developed in a prepandemic world:
The pandemic also effected change: Long hours alone, lots of time to think, and a mixture of curiosity and boredom led many individuals to start investing on their own because—to put it bluntly—there wasn’t much else to do. Stock market dips in 2020 made stocks cheaper to buy, and some people found themselves with extra cash (hello, stimulus checks!). All of this led to a perfect storm for investors. They charged the investment world with a do-it-yourself, empowered mindset.
What’s more, it seems like every other day, the stock market is closing at record highs. It’s on the news. It’s online. It’s everywhere we look. The prospects of a recovering economy, low market volatility, and increased household spending have led to a rising market, and many new investors are left wondering how much they should keep investing (or if they should continue to invest at all).
For some of you, it may feel like history is repeating itself—interest in the markets and investing waxes and wanes over the years as the markets fluctuate. But our principles are time-tested to help investors build and hold portfolios for the long-term across all market conditions. At Vanguard, we’re always excited to welcome new investors—the second best time to start investing is today—and encourage our shareholders to make decisions based on sound, time-tested investing principles: goals, balance, cost, and discipline.
* Susan Tompor, 2021. Why new investors bought stock during the COVID-19 pandemic
All investing is subject to risk, including the possible loss of the money you invest. Be aware that fluctuations in the financial markets and other factors may cause declines in the value of your account. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.
Diversification does not ensure a profit or protect against a loss.