Long term thinking leads to serenity

It’s now almost serene. The chaos and instability has gone. It’s very predictable. Anyone (one does not have to be an expert) can safely say that it is probable, but not certain, that a balanced portfolio will return somewhere between 4 % and 8% a year in any given ten-year period.

There are no negative ten-year periods. As we saw above, there were plenty of negative years, and even more negative months, but as time goes by their effect is always outweighed by the positive periods. There is safety in time. Time is the investor’s friend.

This is why clients should always start with a minimum holding period of at least ten years before they invest directly or indirectly in shares or property.

The authors note the influence of the article “Long-term investing: the destination is better than the journey” by Peter Gee, a research products manager with Morningstar Australasia, published in www.cuffelinks.com.au on 10 December 2015. We borrowed their graphs as well.

You can read the original article here: Long term investing: the destination is better than the journey.