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Timeless investing: tools to help you stay focused on your investment strategy

Date: Feb 10th, 2015

Given the continued volatility in investment markets, it’s no wonder some investors develop mixed feelings about investing in shares. When markets are volatile, emotional instincts can begin to play a role in investment decisions. In this environment, a well-anchored investor stands to benefit by persisting with an appropriate investment strategy to achieve long-term results.

In the video below, we discuss why it’s so important to allow sufficient time for your investments to grow.


Tools to help you focus on long-term goals

Many advisers have told us that their primary role is to help their clients stay focused on their long-term goals. Specifically, they can add significant value by helping clients resist the temptation to switch strategies in times of market volatility.

We have assembled a presentation to help put a range of investment themes into perspective. Click here to download.

Investing over longer periods improves the probability of a positive return

Share markets do have their ups and downs, but over time the market has always recovered and prices have trended upwards. Over the long-term, many investors have also benefited from good dividends along with tax credits. This highlights the importance of maintaining a long-term discipline when investing in economically-sensitive growth assets like shares.

Source: Bloomberg, ASX All Ordinaries Index. Data as of 31 December 2014.

Final thoughts

For humans, ‘herd mentality’ is very strong, and present in everything we do. Emotions can drive an investor’s decision-making as most of us are heavily reliant on social norms and trends. It is important for investors to recognise that making an investment decision that’s driven by emotion instead of analysis can result in costly mistakes. Quality financial advice can assist clients in establishing sensible goals and in designing an investment strategy consistent with their capacity for investment risk. An understanding of market cycles can then help investors feel confident, even in volatile times, that their investment strategy remains on track to support the achievement of their goals.

About the Author

Jeff Rogers, Chief Investment Officer, ipac Investment Management at AMP Capital, joined AMP Capital in 2011 from ipac securities following its acquisition by AMP Ltd. He has over 27 years of investment management experience. Jeff holds a Bachelor of Science (Honours) from the University of Melbourne.

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