Investors Get Paid To Think Long-Term


Posted in: Economics, General, Stock Market, Thought of the Week

Investors who have participated in the DIAS Conservative Income (CI) portfolio since the beginning of the year are well on their way to generating 4-6% returns. However, investors that got started with CI in June are not seeing similar returns given the market corrections experienced over the summer. Our Investment Committee feels that the market correction is temporary and we have already started to see a nice recovery in equities.

Volatility in equities is to be expected and rather than panic when we see these small corrections, it’s best to first understand why we are experiencing them. Currently, we see very little risk in owning equities going forward. Volatility in most cases is caused by short-term traders trying to time specific market events. As a result, we strongly urge investors of CI to measure performance over an 18-month time horizon at the very minimum. Selling during these market corrections is a formula for locking in short-term losses and missing out on long-term gains.

The bottom line is that in the long-run stock prices rise but investing in equities requires patience. Our Investment Committee sees several key indicators that point to a secular bull market over the coming years. Long-term investors need to tolerate any short-term pain caused by non-fundamental reasons in order to achieve long-term gains. Read this week’s Thought of the Week to learn more about investing for the long-term.

Click Here for the Weekly Thought

As an Investment Advisory Representative working in conjunction with Global Financial Private Capital (GFPC) we are provided weekly thoughts on what is happening in the economy and the market. Written by our investment committee at GFPC we find these thoughts to be informative and interesting.