Long-term thinking is a key component of successful investing. But, in his latest post for rockwealth Brighton, ROBIN POWELL explains how looking beyond the here and now can benefit us in all sorts of other ways too.
If there’s one piece of advice I like to give investors it’s that successful investing requires long-term thinking — preferably very long-term thinking.
Many people do the complete opposite of : they obsess about short-term performance and what’s happening in the here and now. Worse, they’re positively encouraged to do so by the investing industry, and by large sections of the financial media, and, gallingly, even by some financial advisers.
That kind of approach is totally nonsensical. No one knows how the financial securities will perform in the short-to-medium term. But throughout financial history, the capital markets have almost always rewarded patient and disciplined investors who stayed focused on their long-term goals — as long as they were sufficiently diversified.
Personally, I find it liberating to have a long-term investment perspective. I really used to worry about volatile markets and gloomy forecasts. Nowadays they honestly don’t bother me at all. In fact I positively welcome so-called market corrections. Why? Because they make equities more affordable and increase their expected return.
I recently read an article that made me wonder whether long-term thinking can improve our lives in other ways. It was written by a BBC journalist called Richard Fisher, who’s just had a book published called The Long View.
© The Evidence-Based Investor MMXXIV. All rights reserved. Unauthorised use and/ or duplication of this material without express and written permission is strictly prohibited.