Markets have experienced a challenging few months. Following the downturn, investors will no doubt be pondering their portfolios. Interesting research3 explores the validity of the longstanding adage – time in the market, not timing the market. The numbers really do bear out

In March 2000, at the height of the dot-com boom, if an investor made an investment of £1,000 in the average investment company and reinvested the dividends, the original investment would now be worth £3,665, a return of 267%. More than triple the amount invested. (Here ‘investment company’ includes investment trusts and other closed-ended investment companies but excludes venture capital trusts and 3i Group plc.) It’s worth noting that this 20-year period includes the dot-com crash, the global financial crisis and the recent COVID-19 related market falls.

Annabel Brodie-Smith of the Association of Investment Companies commented on the findings: “The bursting of the tech bubble and the global financial crisis saw huge falls in markets… However, investors who were able to stay invested or even invest during the downturn would have been richly rewarded over the long term. No one has a crystal ball, but these returns show the power of long-term investment and why it can often pay to have one eye on your portfolio and the other on the horizon.” 3AIC, 2020

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