Keep your Calm with Investment Fluctuations

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) April 4, 2011 -- An old saying holds that investing is a marathon, not a sprint. And just like marathon runners, long-term investors can experience the emotional ups and downs of running long distances — from euphoria when they’re ahead to discouragement if they slip behind or stumble. Managing those feelings is the key to endurance and crossing the finish line.

Reputable financial service companies assess the suitability of mutual funds and other investments in your portfolio based on how consistent their performance is over the long term, and how well a fund’s characteristics suit your investment timeline, goals, and risk tolerance. To do this, they look for professional mutual fund managers who manage risk in many ways, such as through diversification of assets and holding true to their mandate and management style through changing market conditions.

Keep a positive perspective

In particular 2009 was challenging for investors all over the world, given the wild swings in the markets. Financial professionals stress the importance of maintaining a long-term perspective in making investment decisions — whatever the market conditions. Markets can rebound dramatically after a period of losses, producing a respectable average compound annual return for those who stayed invested. This suggests that performance of any one mutual fund or asset class in any one year matters far less than the performance of your entire portfolio over many years.

Diversified portfolios gain over time

A balanced approach is used for many investment plans. For long-term investors, a goal may be to build an “all-weather” portfolio that does well when the sun shines, yet is positioned to withstand damage from the occasional storm. Historically, such mutual fund portfolios have delivered superior returns over time. For example, the Morningstar Canada balanced global index of mutual funds — 60% in equities and 40% in fixed income — made money in 18 of the 22 years from its inception in 1985 through 2007. Annual returns ranged from a loss of 6.5% to an eye-popping gain of 43.8%. The 22-year average compound annual return was 9.4%.

Emotions can mislead you

What’s been dubbed “the cycle of market emotions” is an investor’s worst enemy because it can prompt irrational behavior to sell investments at a low point. As markets climb, the cycle starts with optimism followed by excitement, thrill, and euphoria as prices soar — prompting people to buy at the top. As markets decline, the cycle responds with anxiety, denial, fear, and panic. Near the bottom, discouragement may drive people to sell low. Eventually, as markets start to recover, the cycle begins anew, with hope and relief on the way up. Where do you now stand in this cycle?

Your timeline matters the most
Market fluctuations are inevitable, but you can still win in volatile markets with the right strategy and a portfolio of mutual funds or investments chosen for their long-term potential. Professional financial guidance can help keep your investment strategy properly aligned with your long-term goals.

Braley Winton Financial Group is a privately owned financial services firm specialized in developing and implementing strategies that achieve a multitude of financial goals and help customers hedge against the many risks in life. Braley Winton’s broad range of customized strategies include Saving, Tax-Planning, Home Purchasing and many others. Braley Winton operates in both Quebec and Ontario and has over $300 million in assets under management. Through it’s partnership with the Executive Planning Group, Braley Winton can deliver its regional expertise in top-tier services on a national scale. More at www.braleyfinancial.ca

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