How to manage investments in volatile times
"I WILL tell you how to become rich… Be fearful when others are greedy. Be greedy when others are fearful," Warren Buffet.
The malaise affecting equity markets and risk assets generally has shown no letup with Australian shares now joining Europe, Japan and emerging markets in a bear market. (defined as a 20% or greater decline from the most recent high).
Global growth worries could drive more short-term weakness. But in the absence of a US/global recession historical trends inform us it is unlikely to be a deep and long bear market.
When the winter comes you have the option to be like the bear and wait it out as long as you have a sound cave (good strategy) to rest in. You can keep in mind.
Sharp falls are part of the course of share markets. Shares literally climb a wall of worry over many years with numerous events dragging them down periodically, but with the general trend ultimately rising and providing higher returns than other more stable assets.
Selling after a major fall simply locks in the loss.
When shares and growth assets fall they are 'cheaper' and offer higher long-term return potential.
For Information contact Tim Maher at Maher Digby Securities Pty Ltd - Financial Advisers - AFSL No. 230559 (see advert Page 3). Ph: 07 5441 1266 or visit our website http://www.maherdigby.com.au This document was prepared without taking into account any person's particular objectives, financial situation or needs. It is not guaranteed as accurate or complete and should not be relied upon as such. Maher Digby Securities does not accept any responsibility for the opinions, comments, forward looking statements, and analysis contained in this document, all of which are intended to be of a general nature. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend consulting a financial advisor.