Liontrust Views Winter 2023 - Flipbook - Page 12
THE IMPORTANCE OF
REMAINING
INVESTED
The past 12 months have been challenging for global equity
markets with volatility at levels not seen for some time.
For many investors, it has been an
While the maxim that what goes up must
uncertain time, with the value of
come down is not necessarily true when it
investment portfolios seesawing in line with
comes to investing, the value of investments
economic ups and downs. In tough times,
can fluctuate significantly according to a
it’s perhaps not surprising that many investors
number of factors, from geopolitical turmoil,
are tempted to cut their losses and withdraw
UK-specific issues, to climate-related events.
or reduce equity investments – or to work
out how to best ‘time’ the market to come in
The history of asset class returns shows
and out of different investments at the most
that
opportune moments.
typically outperform their government bond
in
developed
markets
equities
counterparts over the long-term, but they do
But attempting to time the markets can in
experience large drops in value in between.
fact be a recipe for poor returns and missed
opportunities. There are many reasons why
Tempting as it might be to pull out of markets
it is important to stay invested continuously
because the value of your investments has
rather then coming in and out – not least of
fallen, by doing so you are crystallising a
which is the difficulty in successfully timing
potentially temporary loss of value into a
the markets.
definite loss. If you then decide to reinvest
when markets are stronger, you will be
12
LIONTRUST VIEWS – WINTER