- Date: 06/02/2018
Given the news of stockmarket falls, we thought it would be helpful to reiterate our views and share them with you. Stockmarket corrections, where the market falls by 5% or more, are a normal part of investing. Over the last 100 years they happen, on average, every 18 months or so. Two weeks ago, in our “View from the Front” we highlighted that the US stockmarket has gone through its longest period without a correction since records began in 1928. So we were due a correction.
Why do these events happen? If we or all the other experts who now pop up on the media tell you that they know, they are deluding themselves and misleading anyone listening to them. They don’t know and if they did they’d be able to time markets, and there is no statistical evidence that anyone has ever managed to do this consistently.
As we’ve always said, invest for the longer term in a diversified portfolio and forget short term noise. As human beings we can’t help but take notice of short term losses. We suffer from an evolutionary bias call loss aversion. It’s one of things that has kept us alive as a species. However, it means that short term headlines of large losses resonate with us far more than long term, incremental gains. We will continue to concentrate on the longer term and the steady accumulation of gains as we believe this will be in the best interest of our clients.
Opinions, interpretations and conclusions expressed in this document represent our judgement as of this date and are subject to change. Furthermore, the content is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or a solicitation to buy or sell any securities or to adopt any investment strategy.
Thomas Miller Investment is the trading name of the businesses in the Thomas Miller Investment Group. This note has been issued by Thomas Miller Wealth Management Limited which is authorised and regulated by the Financial Conduct Authority (Financial Services Register Number 594155) and is a company registered in England, number 08284862.