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Time Heals All

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Investing in equities is a popular choice for those seeking to grow their wealth over the long term. However, the fear of market volatility can cause many investors to shy away from equity investments altogether. While it’s true that equity returns can fluctuate substantially in the short term, investors should consider the historical trend of equities becoming less volatile over longer holding periods.

Moreover, equities are known to provide the potential for growth, which is critical for building retirement savings. Simply relying on interest-bearing investments may not be sufficient to keep up with inflation, which can erode the value of savings over time. Therefore, it’s important to allocate at least some portion of one’s investment portfolio to equities to ensure a better chance of reaching savings goals.

That being said, it’s also essential to acknowledge the risks involved with investing in equities. While a certain level of risk is necessary to achieve growth, being too conservative can also be a risk in itself. Investing in equities involves market risk, which is the risk of losing money due to market fluctuations. However, investors who can tolerate market risk and hold on to their equity investments over the long term can potentially reap the benefits of higher returns and greater wealth accumulation.

In summary, while investors should be mindful of market risks associated with equity investments, they should not let their fear of volatility prevent them from investing in equities altogether. Investing in equities can provide the growth potential needed to achieve savings goals, and over a longer holding period, equities tend to become less volatile. By diversifying one’s investment portfolio with a mix of equities and other investments, investors can potentially achieve greater wealth accumulation while managing market risks.

A Comparison of the highest and lowest returns for various investment time frames from January 1, 1974, to December 31, 2005

 

 

The opinions expressed within this article/communication are those of the Financial Advisor and are not necessarily those of Keybase Financial Group Inc. Any data provided is for illustration purposes only. Clients and prospective clients should always read a product prospectus and fully understand all of the risks associated with the product before purchasing. Any information relating to the discussion of taxation issues is considered to be only general in nature. Clients should seek a qualified tax professional to discuss their specific tax requirements.
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