If I Could Tell All Long-Term Investors Just 1 Thing Right Now, It's This
2026-10-09 20:15
•Stefon Walters •The Motley Fool
•• • Axe Cap view
The One Lesson for Long-Term Investors: Embrace Compound Earnings
Consistent investment and the power of compound growth trump timing the market every time.
Many new investors get caught up chasing fast gains or trying to time market swings, but that’s a losing game for most. The quiet hero in wealth-building is compound earnings — returns that generate returns, snowballing over decades. If South Africans build a habit of investing regularly, even in global assets like the Vanguard S&P 500 ETF (VOO), they stand to benefit from decades of growth. VOO has averaged around 11% annual returns since inception. That kind of growth, combined with regular contributions, can turn small amounts now into meaningful wealth later. Sure, the rand’s strength or weakness versus the dollar (USD/ZAR) can add short-term volatility. But over the long haul, the compounding effect dwarfs currency noise. On the JSE, look for stocks with stable, growing earnings like Naspers or FirstRand, which can also compound value. This view could be wrong if global markets suffer prolonged downturns, but staying consistent beats timing. this is just our opinion and not financial advice
Start a regular, automated investment in VOO or a similar low-cost S&P 500 ETF. In local equities, focus on shares like Naspers or FirstRand that show steady earnings growth and dividend reinvestment potential.
- VOO
- Naspers
- USD/ZAR
- Extended global market downturn reducing compounding returns
- Sharp rand depreciation increasing local currency investment volatility
7/10
The article emphasizes the power of compound earnings as the most important wealth-building strategy for long-term investors. It recommends investing consistently in an S&P 500 ETF, particularly the Vanguard S&P 500 ETF (VOO), as a simple set-and-forget investment. Historical data shows that $500 monthly investments could grow to over $1.18 million in 30 years based on VOO's 11% average annual returns since inception.
Our take is based on reporting first published by The Motley Fool.