This is what long-term investing looks like

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Investing for the long-term means committing to a genuinely extended strategy.

One of the most often repeated pieces of financial advice is that you should invest for the long term. It is so fundamental that if you search the internet for ‘basic principles of investing’, it comes up in one form or another more than anything else.Many investors might consider five years a good period of time to dedicate to a particular strategy. After all, a lot can happen in half a decade.

The years that are coloured red indicate an investment that is performing below inflation. Those in light green are beating inflation, and dark green designates investments returning above inflation plus 5%.If you only consider the first one to 10 years of any investment into the Alsi, there is a 14% chance that the return would have been below inflation. Only 69% of the time would investors have earned more than inflation plus 5% over these periods.

Anyone who had invested in the Alsi in 1969 would have had to wait 10 years before their return climbed above inflation. This was the deepest and most protracted period of weakness in the local market over the past 50 years.

 

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