On the face of it, it’s easy to put that argument over, but I wouldn’t be too hasty. Certainly the last 5 years and more have been challenging for equities and at least one investment guru/expert – Bill Goss, co-founder of Pimco thinks it might be. Fixed interest investments have been a much better investment over the last 10 years, but how long can it continue?
I’m reasonably confident that fixed interest investments cannot to continue to show the returns that they have over the last 5 years and many regard them as currently overpriced. The trouble facing fixed interest investments currently is that as their value has risen year on year, the yield on them has in turn fallen dramatically. So much so that some sovereign debt now has a negative yield. What this means is that investors are prepared to accept either no income or even lose some of the value of their investment, so that they avoid any market volatility.
Back to equities. Equities through the past decades have often shown long periods where returns have not been particularly exciting. But there is one golden rule that every investor must follow. And that is “you have to be in it to win it” No one know when the market is going to go on its next bull run, so being ready for it means you need to have at least some of your money in the market.
I can’t tell you when the markets will rise again, but I can tell you that it will happen. We just need to be ready for it.
Before investing, always seek professional advice from a qualified financial adviser. The value of your investment can go down as well as up. The views expressed here are my own personal views and should not be construed as advice.
