In the instant world we live in the meaning of long term is getting shorter and shorter.
In Asia, long term investments mean generations. My view is 5-10 years, but it seems in the new world of “You can have it all” long term is quickly being reduced to weeks.
We hear a lot about market recoveries either being the US, Housing, Australian Share market or the European markets. We now have the daily comments from the glorified morning TV experts who tell us what the markets are doing and what caused it. With all of this instant advice and opinion it is no wonder that the average investor lives in a constant state of fear about their investments.
This week we saw this fear take hold again with the introduction of the Carbon Tax, wiping 3.5% off the market in one week. Even the Carbon tax is short sighted, the industrial revolution was between 1815 and 1915, and as such we have been pushing carbon dioxide into the atmosphere in a substantial way for over 100 years - yet our reduction targets are only over 9 years. Why so short sighted? Because any longer and people lose interest.
The below chart shows the ASX 200 accumulation index since 2003. Over this time the market has doubled in value or returned 14% per annum. Agreed the market has been higher but if you just look at the starting and finishing point you would say that this is a good return.
To achieve great results you need to focus on the long term, once again we are in a period of turmoil where people are focused on the short term.
Short term, I expect we will see the market fall a little further, this for me is a buying opportunity.
As a long term investor I expect I will make a fortune on the stocks I buy in the coming 12 months.
For more information please call me on (07) 4771 4577.