Just a brief note to share a thought on the recent market activities. As a long-term investor in equities, I remind myself regularly that I am buying a small stake in the world’s most innovative companies. These global businesses are the service, travel & leisure providers, drivers of technology and manufacturing advancements, medicine discoverers, communication enablers, food producers, green energy innovators, etc. who shape the world as we know it today.
Although it is nigh impossible to put a future value on these companies currently, if you are a regular investor, today you are purchasing a stake in these companies at a discount to what they were valued at two months ago.
If you are fully invested, then it is worth noting that you already own that stake and if you SELL now, you are gifting somebody else a potential bargain.
Remember, SELLING equities in a temporary decline in markets could lead to a permanent loss to your portfolio and a bargain to someone else, which is not rational.
Experience from a decade ago teaches us that these world innovators will adapt, will revamp their business, will tool up and will face the new business environment in a post Coronavirus era. This may involve new ground being broken, a change in business and work practice or new products and services.
So, during these temporary declines in valuations, it is important to remain rational and recall that it is “diversity & time in the market, not market timing” which leads to better investment returns over the long term. This is exemplified by the S&P500 index of North America’s biggest 500 companies (above)
If you have any queries or concerns about current market conditions, please do give me a call on 085 866 9813.
Please do stay safe & check in on those who are cocooned.