If I'm a long term investor, buying a stock or ETF at its higher price, does it matter?

Hi, prices of which you buy at definitely do matter as they affect your return on investment.

Higher prices also exposes one to more risk. Intelligent investor is a good read.

"An intelligent investor realises that when the stock price is high, risk increases Not decreases. When the stock price is Low, risk decreases, not increases." Benjamin Graham.

"A great company at the wrong price can be a horrible investment." Warren Buffett and Charlie Munger have said this multiple times in interviews.

Ultimately, it is very tempting to just jump at our favourite stock picks but we have to remember that prices affect our returns and risk. Thus, being patient is an essential attribute an intelligent investor must develop. Even if we buy at high prices, you are right, over Long periods of time it can become profitable. However, we must remember the opportunity cost. Waiting 10 years for a 20% return is different from waiting 2 years for a 20% return.

There will always be opportunities in the market, expanding our circle of competence and opening up our minds to other companies may surprise us of great investments we may find.

Hope this helps(:​​​

Hey Anon!

the best way is to put in funds periodically, to average out the costing so be it high or low, you'll be purchasing units.

Read this tip which is my favorite so far "time in market is better than timing the market". And I guess this works well for long term investment. :)

Dollar-cost averaging in the index is the best way to go about investing safely in the long term.
When we talk about the market going up, we are referring to the S&P 500 index.

Here is a summary of why it will always go up in the long term

1. Inflation

• In 20 years, companies will price their products higher, for example, a big mac will be priced more, causing increase revenue which leads to higher market prices for stocks

2. Population growth

• More people in the world, companies will grow to support it, therefore increase revenue and profits leading to an increased price in the index

3. 500 companies in the index are best of the best

• A moment a company is not a market leader, it is replaced by another profitable company

• Eg. GM, they used to be in the dow jones, but now they are kicked out because they are no longer good company

• With the best companies in the index, the market will always grow higher

4. Technology

• Over time, businesses will become more efficient as technology improves leading to increased profits

The longer you hold (recommended 20 years or more) the more one time trading fees or buying at "high" price average out