How can I benefit from being a long term investor?
What we have learned from the financial markets is that there is a strong relationship between volatility and time. For most investors, it is hard to time the market, but we have good news! Historical data shows that staying invested in the markets over the long term pays off.
If you are a long-term investor, time is on your side. It allows you to take more exposure to riskier assets without having to worry too much about the market’s short-term noise.
A long-term investment portfolio is often composed of an equity component, which can vary in size in function of your personal risk appetite or risk aversion, and generally offers the highest expected returns. Thus, equities can help you reach your long-term goals.
Of course, not only equities offer an attractive expected long-term return. High yield and bonds from emerging markets, too, are suitable if your investment horizon is at least 3 to 4 years.