Recent volatility should not cause investors to abandon their long-term investment strategies, says financial planning dealer group Infocus Wealth Management.
In a recent update, Infocus warned investors to remain committed to their long-term investment strategies, arguing that 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 said.
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.
“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.
The dealer group reminded investors that volatility is not simply an indication that markets are going down, but are fluctuating instead.
The multinational investment group recorded a 4.8 per cent climb in revenue during the 2020 year, as its performance fees ascended by 457.4...