Where will your goals take you?
While short-term market conditions tend to grab headlines, for investors it’s the long-term story that really counts. And while markets do fluctuate on a daily basis, asset values have steadily increased as the Vanguard 2020 results chart clearly shows, over the last 30 years.
Recent world events have illustrated just how volatile investment markets can be over very short periods of time. While the short-term behaviour of investment markets can’t be controlled, it is always wise for investors to focus on the things they can control. These include having a good long-term plan, diversification across multiple asset classes, diligently staying the course and to minimise costs.
Keeping costs low.
Cost remains one of the most important factors in successful investing, in any market cycle. It’s why low-cost funds tend to deliver better returns than high-cost funds over time. To reduce costs where possible is key. After all, every dollar you save in fees is a dollar more in your pocket! This gives investors their best chance for more success.
The Wisdom of Diversification
The index chart illustrates the benefit of diversifying investments across asset classes to help reduce volatility and smooth out returns over time.
Diversification often starts by investing across different asset classes but it also includes holding a spread of investments within an asset class across a range of companies, industries and even countries.
While this strategy doesn’t protect a portfolio against negative returns, it does reduce the impact of poorly performing asset classes.
This is the most important single piece of investment wisdom I can give to you. As I always say, “stay the track” no matter what happens, stick to your plan.
Investing For The Long Term – Vanguard results 2020
Market cycles are a influenced by economic, political and social events showing markets as seemingly unpredictable. And by allowing emotions to drive investment decisions, be it fear in falling markets or overconfidence in rising markets, these types of decisions very rarely serve investors well. History shows that those who ignore these emotional decisions during short-term market fluctuations and focus on their long term plan are rewarded for their patience and discipline as seen in the Vanguard results 2020.
Take a look at the interactive chart here
Remember, Action is power!
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Disclaimer: This article is information only. It is not intended to imply any recommendation about any financial product(s) or to constitute financial or tax advice. The information in the article is reliable at the time of distribution, but may not be complete or accurate in the future.