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 Long
Term Investment Planning
Plan for
today...but don't forget tomorrow
 When
developing an investment plan, it can be tempting to centre all of your
attention on your goals for today and the very near future. It often seems
to make more sense to concentrate on saving money for an item such as
a new car that provides immediate enjoyment instead of for your retirement
which may still be several years away.
However, it pays to keep in mind
that the strength behind any investment plan can be tested by determining
how well it will stand up in the long term. Since your financial future
may encompass a period of time that stretches over several decades, you
are putting that future at risk by concentrating solely on the present.
At Fiscal Agents, we understand
the importance of reviewing your financial plan on a regular basis
because your needs and goals will change as you age. We want to ensure
that you are as prepared for your retirement goals as you are for your
short-term plans, and that means taking the big picture into consideration
when laying the foundation for your financial future.
Investment planning for the long term
The key to long term planning is having a proper allocation of your investments
and savings so that short term needs and unexpected emergencies are looked
after. In this way the long term portion can be left to grow for your
future needs.
Long term investments mean just that. You must be prepared to leave the
capital alone for 5 or more years as compound growth over several years
is critical to amassing your nest egg. But what if part of your portfolio
is in mutual funds that are dropping in value? Should you sell them to
protect your capital? In many cases the answer is no. Remember we're talking
about long term investments here. Market fluctuation is normal and even
lengthy periods of market declines are not uncommon.
Hopefully your portfolio is structured so that it conforms to your stated
risk tolerances with a portion of it designed to provide stability in
times of market declines. On the other hand if you are nervous about seeing
your capital periodically fall in value and a large portion of your investments
are in technology funds than you should have the portfolio properly restructured.
Assuming that your current situation meets your previously stated comfort
level, what you should do is take advantage of the falling markets and
add to your mutual fund holdings. Wouldn't you prefer buying good quality
investments at the low points of their market cycle rather than at their
peak?
Successful long term investors such
as Ben Graham, Warren Buffett and Sir John Templeton use this philosophy
of buying great companies when their stock prices are low and ignore the
market and media hysteria that changes from day to day.
At Fiscal Agents we can help give
you the confidence to invest over the long term. Part of our Cornerstone
Planning process involves working with you to choose investments that
are right for you in order to build your confidence as an investor.
But don't just take our word for it...
Take a look at the links below to discover some of the many benefits of
long term investing.
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The
proof
Investments in the equities
market benefit from a long-term investment plan. Check out results
over a 42 year period to see long-term investing in action.
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Click
to view Postcard |
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Timing
the market
The stock market is anything
but predictable. It is a guessing game that is known for
its frequent fluctuations that can be detrimental for those in only
for the short term. Find out about the difference that investing
over a long period of time can make.
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Click
to view Postcard |
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Bear
Markets
Bear markets, or periods
of stock market decline, can be beneficial to long term investors.
By acquiring stock when the market it low and remaining invested
in it over a long period of time, investors can obtain significant
rates of return since stock market gains have traditionally outweighed
losses.
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Click
to view Postcard |
Inflation |
Retirement |
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