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The Benefits to Staying Invested

As most major indices around the world close in on or even surpass their all-time highs, most investors will have reaped the benefits of employing a long term strategy over the last six months, staying invested and not panicking when the share market goes through even the most dramatic of falls. In fact, as investors, you have now all lived through the sharpest, shortest market crash in living memory, followed by a similarly spectacular recovery and are still here to tell the tale.

Unfortunately, one of the problems the share market faces is that no one is ever happy – if prices are falling then the doomsayers warn the worst is yet to come, if prices are going up then the narrative changes to how inflated share prices are and investors should wait for the next buying opportunity. This usually results in people forever waiting on the sideline for that “perfect” opportunity that never comes, and we have seen people miss out on far more money by leaving their wealth in lower and lower rate term deposits than we have seen people lose money by investing at the wrong time.

Therefore, we thought now would be a good time to reaffirm the benefits of sticking to an investment strategy, rather than trying to time entry and exit points. As the following graphs and charts illustrate, the old adage of ‘time in the market is more important than timing the market’ still rings true and the opportunity cost of not being invested can often be the most expensive mistake some people will make. Please feel free to contact your adviser if you’d like to discuss any of the graphs below, or anything else in general.

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