The title to this post may seem obvious. But looking at the actions of some people at the moment, it is far from obvious.
I wrote an article a while back about why I’m not concerned about stock market volatility or drawdowns. Yet people continue to always want to focus about short term results of their growth assets. Maybe my blog doesn’t have much reach after all 😊
I don’t understand why the desire to switch funds all the time based on what is happening in the market today.
This isn’t really helped by the fund industry itself promoting awards for fund manager of the year and fund of the year. It is a glorified waste of time.
I want 20 year winners. Not one year winners.
If you are investing in stocks for the short term, then sure. You have reason to be worried. You roll the dice through your investment plan (or lack thereof). Expecting good returns in the short term is gambling. Expecting good returns in the long term is not.
But if you don’t need your growth investments for many years, then why are you worried? Why are you focusing on the short term?
Who cares what the stock market volatility is today? In 20 years time a diversified portfolio will look like a smooth line up.
Who cares what political event is happening today? In 20 years time it will long be in the back of your mind (note, I am talking about what happened to your finances during that time before you label me as tone deaf).
Who cares if your fund or stocks are losing money today? They are the same stocks you held before they went down and you won’t lose money unless you sell.
At the end of the day, if you are still worried after all that, then your investment allocation doesn’t fit with you. Either it is too aggressive or too undiversified for your goals, timeframe, and/or personality. A change needs to happen there, for without an investment plan, you are on a boat without a skipper. You are directionless.
But the first step is understanding that judging long term results on short term results is fraught with error. I can say this as a long time supporter of NZ sport. I can never feel comfortable in the final result until the final whistle. Winners are rarely declared early.
Investing is a long game, and it requires a long term perspective.
If you need an investment plan or recommendations , then get in touch today.
The information contained on this site is the opinion of the individual author(s) based on their personal opinions, observation, research, and years of experience. The information offered by this website is general education only and is not meant to be taken as individualised financial advice, legal advice, tax advice, or any other kind of advice. You can read more of my disclaimer here