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
It is important to take professional advice before making any decision relating to your personal finances. Information within this page is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.
Tax and Estate planning are not regulated by the Financial Conduct Authority
The value of pensions and investments can fall as well as rise. You may get back less than you invested.
Will writing is not regulated by the Financial Conduct Authority. Quilter Financial Planning Ltd are not responsible for any will writing advice.