--- title: Want to Make Money in the Stock Market? Try Doing Nothing description: An experiment by Morningstar's Jeffrey Ptak found that a hands-off approach to investing performed as well as the S&P over a 10-year period. authors: - name: Sarah Hansen role: Senior Writer url: https://money.com/author/sarah-hansen/ bio: Sarah Hansen is a senior writer at Money covering all things personal finance. Previously, she covered economic policy and capital markets on the breaking news desk at Forbes. education: Northwestern University, New York University at_money_since: 2021 articles: 347 covers: - Investing - Banking - Business - Career Advice - Credit - Credit Cards - Economy and Politics - Education - Health and Wellness - Housing - Insurance - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes social: - https://www.linkedin.com/in/sarah-m-hansen/ former_staff: true published: '2023-04-19T11:09:23.000Z' modified: '2024-04-17T13:08:05.000Z' section: Investing tags: - News - stocks word_count: 599 canonical: https://money.com/make-money-stock-market-do-nothing/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Man relaxing doing nothing while stock graph in the back goes up](https://img.money.com/2023/04/News-Do-nothing-investing.jpg) The best way to make money in the stock market may be... doing nothing at all. That’s the idea behind a recent [analysis](https://www.morningstar.com/articles/1150002/what-beat-the-sp-500-over-the-past-three-decades-doing-nothing) by Morningstar chief ratings officer Jeffrey Ptak, who created (and analyzed) a model portfolio of [S&P 500](https://money.com/how-to-invest-in-sp500/) companies that a hypothetical investor had been holding — and not touching, except to reinvest dividends — for the last decade. His discovery? The hands-off method performed just as well, if not better, than the entire index. The “do nothing” approach to investing isn’t new. It’s the idea that over the long term, setting up your portfolio and letting it grow will leave you better off than making frequent changes, chasing short-term gains or reacting to news headlines. It’s an especially important lesson for investors right now, when markets are volatile and the economic headlines are especially scary ([inflation](https://money.com/march-2023-inflation-interest-rates-market/)! [Interest rate hikes](https://money.com/fed-interest-rate-hike-march-2023/)! An [earnings recession](https://money.com/why-stocks-could-fall-earnings-reports/)!), and it feels to many like the next crash could be right around the corner. For nervous investors, there’s a lot of temptation to move money out of poorly performing assets and into safer ones — or out of the market entirely. For bolder investors, it can be equally tempting to hunt for bargains when asset prices are falling. ## Time in the market beats timing the market ### The brokerage you choose matters. Try SoFi®, the investing platform helping people become better investors. See what makes us different. [Start Investing](https://money.com/pr/se6c714d0d7f?ap_referrer=%2Fmake-money-stock-market-do-nothing%2F) INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE. Brokerage and Active investing products offered through SoFi Securities LLC, member FINRA / SIPC. ## How ‘doing nothing’ performs in the stock market Luckily, Ptak’s “Do Nothing Portfolio” — which was based on all of the S&P’s holdings as of the end of March 2013 — reveals an easier way to beat the market. The basket generated a 12.2% return over the 10-year period between 2013 and 2023 — nearly exactly the same as the performance of the entire S&P 500 index over the same time. It was also less volatile. That’s especially surprising, Ptak wrote in a blog post, because his portfolio wasn’t rebalanced or adjusted as the [S&P 500](https://money.com/what-is-the-sp-500-index/) changed. In the index itself, on the other hand, stocks were added and removed. At the end of the decade, the portfolio also equaled the S&P 500’s performance despite holding a considerable amount of cash, which Ptak added to the basket as companies in the S&P were acquired over the course of the years. He says this cash helped cushion the blow of declines in the market without dragging too much on returns. Ptak was able to replicate his results over two more 10-year periods. He determined that “the Do Nothing Portfolio would have acquitted itself very well over the full 30-year period, earning a slightly higher return than the S&P 500 with less volatility,” he wrote. He attributed that success to a few factors. For one, holding cash in a portfolio (rather than being 100% invested) can insulate against losses and allow for new investments when necessary. Second, [resisting the temptation](https://money.com/why-overconfidence-hurts-investors/) to add new stocks to the basket (or remove them) when they’re added to the index helps maintain that cash flow and reduces the need to [agonize](https://money.com/why-keep-investing-when-stocks-down/) over the decision to [buy or sell](https://money.com/how-to-buy-stocks/) a single firm. Lastly, the portfolio's design allows it to maximize returns from big winners, like [Apple](https://money.com/how-to-buy-apple-stock/), because there's no rebalancing involved. But, wait, that's not all. There’s one more big lesson for investors from this experiment, according to Ptak: “Leave intuition at the door.” The stock market is notoriously unpredictable, and it’s wrong to assume that you need a complicated strategy to come out ahead. “Patience and humility beat action and good intentions,” Ptak wrote. ## Want to grow as an investor, no matter your level? ### SoFi® is the investing platform that helps people become better investors. Build your portfolio alongside over a million other community members. 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