There may be a place in your investment portfolio for low cost investment tools such as ETFs, however, only using this form of investing can lead to limited to no protection when the market drops.
Short term investing produces the best results as my investment manager can quickly sell positions before they decline in value.
While we would like to say that we always exit our clients’ investments at the top of the market this is not the reality. It is essentially impossible to always exit positions before they drop therefore having some downside protection in your portfolio and investing in stocks with a longer term horizon is beneficial.
Having a long term investment horizon is only for people who do not understand how the stock market works.
Many years of data proves that investors are better off with a long term investment horizon. We believe in selecting our clients’ investments for the longer term as through our in depth research and analysis we have the power of our conviction when making investments. This can sometimes mean that a certain investment drops in value based on the shortsightedness of investors but over the longer term it will show growth.
Dividend paying equities are boring and slow growth.
Simply because a company sets some cash aside to pay out to its investors does not make it a boring or slow growth investment. On the contrary, we believe it places a restraint on management to act prudently on behalf of its investors and to grow while maintaining a certain level of financial discipline.
The stock market is always right therefore following the Index, otherwise known as passive investing, produces just as good if not better investment returns than picking stocks based on analysis (active management).
By selecting investments based on fundamental analysis and valuation we are able to choose which stocks and sectors we believe our clients should have exposure to which can result in a level of downside protection from the overall stock market.
Dividend paying equities do not perform as well as other equities.
There may be periods of time where dividend paying equities do not perform as well as the rest of the market, however, over the longer term (30+ years) dividend payers have outperformed the broader market.