One of the greatest advantages you can have as an investor is a long-term perspective. Effective financial planning absolutely needs to take into account your short and medium-term goals, but the magic really happens when you take a step back and think big. In this month’s client corner, Nick Murray discusses how investors should think about the stock market.
Stay With Quality
Long-term investors who have been through sell-offs in previous years know that time is on their side if they own good quality investments.
High quality, blue-chip investments with a proven track record of earnings performance or dividend payout may be dragged down with the turbulence, but will typically have less dramatic price fluctuations. As long as the business outlook for the company has not changed, it is likely that its share price will be restored when the market recovers.
Remember The Big Picture
Dramatic markets make good headlines, but they need perspective. Volatility is typically a short-term phenomenon measured in days, weeks, and months. But over the years, the historic performance of the stock market is a patient reflection of the growth in the economy and the businesses that contribute to that growth. Long-term investors can take comfort in the steady increase in value that major stock markets have demonstrated over the years.
Financial markets are resilient. They have crashed, recovered, and reached new high’s time and time again. Patience and discipline will ultimately determine your success over a lifetime of investing. There will be times where you are tested and it’s important to lean on your long-term plan and you will come out on top.
We hope you enjoyed this month’s Client’s Corner. Please do not hesitate to reach out if you have any questions or feedback.
Thinking about hiring a professional to help you implement a long-term financial strategy? We would be more than happy to set up a 30-minute discovery call to get a better understanding of your unique situation.
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