What Is Old, Is New Again …

What do Greece, Asia, South America and Russia have in common? The have all been through the same economic troubles at some point in their history.

This is not to say that what is currently happening in Greece and Europe is not unnerving and creating great worry amongst clients who are concerned about their retirement investments.

Investors must remain disciplined and have a diversified investment portfolio in quality assets including; shares, property, fixed interest and cash.  It is inflation which will cause a loss of capital when income is needed and your investments aren’t growing over the long term to keep apace.

If you have a diversified investment, with 70% to growth assets, there is a 32% chance that your savings will run out in 30 years.  If you had another diversified investment, with only 50% in growth assets, you increase your chances of running out of money over 30 years to 85%.  – Source:  Millman Research Report, May 2012

Studies undertaken in the US have shown that investors sticking to a long term disciplined and consistent approach to investing despite volatility made 11.8% where those driven by emotional decisions only achieved 4.3%.  – Source: Daybar Inc Experience of United States investors in equity mutual funds, compared to S&P 500 20 years to 2008

At this time investors should be looking at undervalued investments which demonstrates a good investment growth potential and produces good income returns.  Companies such as; BHP, National Bank, Woolworths, Woodside and Westfield, in other words, companies which are still likely to be around in ten, twenty, thirty years’ time.

It is important when investing for the long term that making emotional decisions based on short term market volatility and uncertainty, can have a disastrous impact on achieving your long term investment goals.  Take heed and think carefully before making any rash decisions based on current world economic woes.

INTERESTING FACT:  The average 60 year old now has at least another 30 years to live. – Source: Australian Life Tables 2006-08

If you really are concerned about your current portfolio for the long term, please feel free to contact us to discuss you investment strategy relative to your long-term goals and investment risk profile.

Call 92932922 or email info@benchmarkconsultants.com.au to make an appointment.

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