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18 Mar 22
Time in the Market, Not Timing the Market: Why Longevity of Investment Is Key
It's been said that the three most important factors to consider when investing are time, patience, and discipline. This is especially true in today's market, which is characterised by high levels of volatility.
Why you should avoid reacting to short term fluctuations
Many investors make the mistake of trying to time the market, or reacting to short-term fluctuations. This can be a recipe for disaster, as it's impossible to predict where the market will go in the short-term. The reality is that even professional investors can struggle to do this consistently.
9/11, Brexit, Covid and now the Russian-Ukraine conflict of 2022. These are all examples of recent events that have caused market volatility. And while it's natural to want to sell when the markets are crashing, this is often the worst thing you can do. When you sell in a panic, you lock in your losses and potentially miss out on the rebound that can follow these types of events.
Don’t be reactionary, but have a long-term investment plan
Instead of being reactionary, it's important to have a long-term investment plan. Volatility is a natural part of the market and it's something that investors need to be aware of. The key to exposing your funds to growth potential lies in longevity of investment- sticking with your plan through thick and thin and not selling when the market takes a dip. Additionally, aim to have a well-diversified portfolio that is aligned with your financial goals.
How True Bearing can help you
An Independent Financial Planner will be able to help you put together an investment plan that considers your specific circumstances. They will also be able to provide guidance on how to weather market volatility and stick to your financial goals.
The value of investments may fluctuate in price or value and you may get back less than the amount originally invested. Past performance is not a guide to the future. The views expressed in this article represent those of the author and do not constitute financial advice.