The Entrust Experience
Last month we mentioned a number of ways parents can help their children learn good financial habits. As financial advisors we, too, are charged with the task of educating. We often coach clients with long-term time horizons about the benefit of staying consistently invested. Not surprisingly, how difficult or easy it is to stay fully invested can be dependent on capital market activity. For example, this year's market volatility rattled the emotions of investors and led some individuals to second-guess their portfolios.
How to make more money
Investors who keep their emotions in check and stay consistently invested may make more money. How? The markets take a "random walk", which means no one can predict when they will head up, or down. Astute investors know that if they want to capture all the positive results, they need to stay the course, volatility notwithstanding.
To illustrate, take a look at this picture
from our blog
that shows the results of a 45-year span of being fully invested. Note the difference in results between the left hand bar graph and the far right-hand graph.
As you can see, there is quite a difference in terms of portfolio appreciation. What caused the short-fall on the right-hand graph? This investor chose to move in and out of the market from time to time rather than remaining invested. He missed the boat, because he was not invested on the 25 best performing days for stocks during that 45-year time span.
What a great example of a picture that is worth a thousand words. And if you are like most of us investors who aim to make more money, the moral of the story is unmistakable.
Balancing Act: Wealth Management Straight Talk for Women
For additional perspective, stay tuned for our book launch on Amazon next week: Balancing Act: Wealth Management Straight Talk for Women
. In the meantime, watch The Key to Success is Consistency
We welcome the opportunity to offer you a second opinion regarding your portfolio of investments. You can reach us: email@example.com