Avoid short-term allure and reap rewards of long-haul investing
Suffering cycles of underperformance is a necessary price to pay in order to enable growth
In a world of instant gratification short-termism is a growing problem – it manifests in investment behaviour and has grave consequences not only for retirement outcomes but for capital markets and economic growth. It is easy to see how we got here. Everyone is facing increasing amounts of information overload – always on, always available and, added to that, it is not always simple to distinguish between credible information and "fake" news. There is also improved access to investment values and a proliferation of investment choice. The result is that anyone who has a responsibility to manage an investment portfolio – be that a professional investment manager or an individual saver – is continuously questioning their decisions and being pushed to implement change in response to new information. The consequences – on which there is unusual consensus from academia and industry – are threefold: savers are missing out on returns, companies are missing out on additive investment o This ...
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