Investing For the Long Term

Australian Share Market Performance : Invest for the long term

Market cycles play out against a backdrop of economic, social and political events and many investors can’t resist trying to assign causes to every hiccup in the markets. But it’s often impossible to explain market activities until long after the dust has settled. 

Markets are unpredictable and trying to time them means investors must get two important decisions right: when to get out and when to get back in. This means there is a risk of having to pay a higher price to get back into the market, as well as missing out on the growth from any market recovery. 

Allowing emotions to drive investment decisions, be it overconfidence in rising markets or fear in falling markets, rarely serves investors well. Historical market returns show that investors who ignore the emotional swirl of short-term market conditions and focus on the long term are rewarded for their patience and discipline.