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Ron Baron: Anybody Can Turn $5,000 a Year Into Nearly $1 Million


By    |   Friday, 10 November 2017 01:30 PM

Investment guru Ron Baron says that any patient investor can turn $5,000 a year into nearly $1 million.

"You have to have a small amount of money and invest it regularly for a long time," Baron told CNBC.

"It's all about compounding," the Baron Capital founder says, referring to the power of making regular investments and reinvesting the returns, CNBC.com explained.

"The simplest thing for people to do is buy an index fund," Baron said.

"If you invest $5,000 a year for 30 years ... it's worth $890,000" based on historical stock market returns, he calculated.

He said that a decade using that strategy would yield $110,000. "If you do it for 20 years, it's worth $250,000."

"The economy grows with the market," he said. "We're thinking the economy growth is going to accelerate, pointing to low interest rates, cheaper oil prices, and disruptive technologies,” he said.

"That means that the stock market growth should accelerate," he said.

Meanwhile, Newsmax Finance Insider Andrew Packer offers his own take on wise investing.

"We’re dealing with the sum of all trader’s hopes, doubts, dreams, and fears. But over time, overvalued parts of the market fall out of favor, and vice versa. Make sure you’re rotating to where the value is," he wrote in a recent blog.

"The laws of economics are also telling us that stocks, despite trading at high multiples on average, can head higher. The real secret to why is within the broad market itself, not the headlines. In this market, individual stocks are routinely taken to the cleaners on poor earnings or bad news developments," Packer wrote.

"That’s a good sign. It shows there’s some discipline in the system. Investors aren’t just buying everything like they would at the extremely optimistic phase at the end of a bull market."

(Newsmax wire services contributed to this report).

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Investment guru Ron Baron says that any patient investor can turn $5,000 a year into nearly $1 million.
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Friday, 10 November 2017 01:30 PM
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