Key Questions for Long Term Investors - Part 3
7. Will making frequent changes to my portfolio help me achieve investment success?
It’s tough, if not impossible, to know which market segments will outperform from period to period.
Accordingly, it’s better to avoid market timing calls and other unnecessary changes that can be costly. Allowing emotions or opinions about short-term market conditions to impact long-term investment decisions can lead to disappointing results.
Annual Returns by Market Index
8. Should I make changes to my portfolio based on what I’m hearing in the news?
Daily market news and commentary can challenge your investment discipline. Some messages stir anxiety about the future, while others tempt you to chase the latest investment fad. If headlines are unsettling, consider the source and try to maintain a long term perspective.
9. So, what should I be doing?
Work closely with a financial adviser who can offer expertise and guidance to help you focus on actions that add value. Focusing on what you can control can lead to a better investment experience.
Create an investment plan to fit your needs and risk tolerance.
Structure a portfolio along the dimensions of expected returns.
Manage expenses, turnover, and taxes.
Stay disciplined through market dips and swings.
If you are not already working with a financial adviser, FFP specialises in providing lifelong advice to relatively affluent families who recognise the advantages of expert impartial advice.