‘Ride through’ volatility, investors told
As SMSF trustees look outside traditional investments for yield, financial planning dealer group Infocus Wealth Management is warning investors not to abandon their long-term investment strategies.
In a recent update, Infocus warned investors to remain committed to their long-term investment strategies, emphasising they should “ride through” the volatility.
“Speed bumps along the way are annoying but they do not alter the long-term view and, hence investment strategies,” the update stated.
The dealer group said investors would be better served by retaining their current strategies and begin to trade when there is a longer period of stability.
“Investors who try to trade through periods like these run the risk of selling during a dip and not buying back until the market is much higher," Infocus said.
“That means such investors are locking in trading losses. It is far better to position one’s investment strategy before these events and then just ride through the volatility – whether in cash or growth assets.”
Infocus also argued that much of the volatility is overplayed and seemingly misunderstood by market commentators.
“Whenever a market moves sharply, it is tempting for analysts to say what is causing that move.
“The truth is there are usually many factors at work and it is impossible to say precisely why a market moved on a particular day,” the group said.
Infocus reminded investors that volatility is not simply an indication that markets are going down, but rather that they are fluctuating.
Read more:
ATO tipped to release new ruling on TRIS