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Focusing on long-term investment objectives rather than short term market volatility

The one thing we know for sure about the market is that it will go through negative periods.

However, predicting exactly when these negative periods are going to be is nearly impossible and trying to time when to be invested or not, could be costly.

Over the past 15 years (180 months) the JSE All Share Index had 70 negative months and the S&P 500 had 59 negative months. Many of the extreme negative months were immediately followed by positive months, which investors would have missed out on if they had disinvested from the market.

Example JSE

Example S&P

Most investors are uncomfortable during volatile times, and no one enjoys negative returns. However, you lock in your losses by disinvesting from the market at the wrong time, normally when emotions are high. This is why it is important to establish long-term investment goals and to remain focused on these through uncertainty and volatility to avoid making emotional short-term decisions.

Maintain your course, stay invested…