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EU Referendum: Time not timing is key to successful long-term investing

06/07/2016

If you want your money to grow, the stock market could be a good place to invest. But forecasting what will happen tomorrow isn't easy, and unpredictable factors can lead to swings in share prices. That's why you should only invest if you can take a long term view and to prepare for a sometimes bumpy ride. During tough times, it's only natural to consider changing strategy. Why not sell and reinvest when things are calmer? This is called market timing. When you aim to sell when prices are high, and buy when they are low. This may sound appealing but it can reduce the chances of achieving your long term investment goals. If you've been invested in global stock market index MSCI World from 2005 to 2015, you would have achieved a return of over 60%. However, if you'd missed the 10 best days over those 10 years, you would have lost around 5% of the value of your initial investment. So while investing has its risks, time not timing is key to successful long term investing.

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