Equity Investments: Looking Toward The Long Term

Equity Investments: Looking Toward The Long Term by Jeff HollandVolatility is an expected component of the markets.

In order to be a successful investor and receive the return you desire from an equity market, you must be capable of tolerating and absorbing price fluctuations, as uncomfortable as it may be.

People want their stock to follow a straight line up – that’s not how global equity markets work.

Many people, in error, equate volatility with loss of capital. Permanent loss of capital is what happens when you sell at a loss, while volatility is daily price fluctuations. When volatility or price fluctuations happen, avoid acting on them.

Unfortunately, investors often seem more concerned with price fluctuations, rather than focusing on their long term goals.

In the human brain, the fight or flight instinct is strong – not necessarily conducive to absorbing and accepting volatility. People want to avoid being in the wrong place at the wrong time, leading them to becoming a speculator, not an investor. Successful investing requires avoiding this instinct to speculate.

If history is any guide and it’s the only guide we have, equity investors will reap rewards over time. Why would an investor care what the price movement is today if they’re looking to fund a goal 5 or 10 years into the future?

Consider Via Four investments as your “rock.” We are here to guide you through the expected turbulence of global equity investing.

Jeff Holland

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