The benefits of long-term investing

Over the years, analysts have come up with a number of theories to determine when it is the right time to invest in a market.

According to a study by Fidelity International, one of the world's largest fund management companies, the key to successful investing is not when to go in, but rather, the length of the investment. They have reviewed specific grwoth returns between 1993 and 2008 and concluded that investors who pulled out of the markets and missed the significant days, have seen their returns reduce. They believe that missing the best days of the period, as a result of early exits, reduced the return by up to 48%.

Having a long-term mindset and lengthening the time you hold your investments can potentially reduce the probability of experiencing negative returns.

A 2003 research report by CSFB on mutual funds data, found that funds that turned over less than 20% per year of their portfolio, returned 179% of value over 10 years. In other words, the best-performing funds hold on to their investments for an average of at least five years.

Why do longer-term investments often yield better results?

Growth returns reflect the investor's ability to correctly predict future share price movements. Individual share price movements over specific timeframes reflect not only the company's profits but also market psychology. Over the short term, market sentiment almost entirely influences share price movements, whilst over the long term, profits dominate.

The difference between short-term investing and long-term investing is therefore the difference between predicting how the market is going to behave versus how the company's assets are going to perform. It is thus seen as less risky to anticipate the company's asset performance in the long-term rather than how the market is going to react in the short-term.

Our experts concluded that the key is not when to invest, but actually the time-frame of how long you are invested for. With the help of a professional adviser, investors can therefore rest assured that they do not need to worry about investing at the right time. Rather one should focus on entering the in right investment. A financial adviser can assist you in choosing a financial product that that best suits your investment portfolio and you long-term goals.

Choose the right market for you, and stick with that. Get your assets managed and let them grow.

Investors must also be warned that adopting a do-it-yourself strategy can often result in substantial losses.

Together with their dedicated adviser, deVere clients can now excess over 5,000 different funds via The deVere Fund Platform. The deVere Fund Platform is an online investment platform, which provides access to funds from a number of leading fund houses. The platform addresses the deVere clients' individual investment needs and offers them access to some of the world's best performing mutual funds.

If you wish to learn more about long-term investing, contact one of our financial advisers today on advice@devere-group.com