INVESTMENT IN UNIT TRUST: Lesson 3: 'Time in' not 'timing'

Thursday, January 29, 2009

Lesson 3: 'Time in' not 'timing'

Patience is its own reward. But patience also rewards investor. Most of long- term gains on equity markets are made or lost in just a few trading days each year. Take away those 'big' returns are more like what you would expect from a defensive investment. Investors who lose patience and get out of the market run the risk of being absent when significant gains are made.
Markets are unpredictable, so picking those 'big'. Staying invested means you capture the full benefits of the share market. Your returns might be down one month, but bywithdrawing from the market you run the risk of missing out on the recovery.

Who should take advantage of shares?

Generally investors with a long time horizon, who do not need to access their money for more than five years. can afford to take on more risk because they have more time to ride out the fluctuations on the market. However, if you intend to be in the market for less than five years, you might consider focusing on the less volatile asset classes such as cash and bonds.

Labels: equity, investment, investor, investors, markets, most long term, patience, returns, reward