Long-term investing for Professionals
Nothing is more mis-understood in investing, than the importance of timeframe, and your liquidity requirement.
There is such a fundamental difference in short-term and long-term investing, that they ought to be given different names. Maybe they should be regulated so that they are forcibly separated!
In fact, this already happens. In simple terms, we have on the one hand, Banks; and on the other, Life Insurance Companies and Pension Funds.
The whole construct of financial markets is (unfortunately) to sell products to investors. To do so, these products are carefully constructed and marketed, using all forms of media as a complicit partner. To make the media addictive and sexy, real-time prices, graphs, flashing colours and numbers grab our attention. Short-term is sexy. ‘Star managers’ are feted when succeeding, but rubbished after a period of failure. ‘Investment Professionals’ are constantly interviewed and reported to tell us ‘what will happen’ to markets, assets, currencies and countries.
The harsh reality is this: no-one knows where markets and assets will go. Yet all of this behaviour drives an enormous industry in ‘short-term’ investments, and behaviours. These include money market funds, publicly quoted shares, supposedly liquid bond markets, currency and commodity speculating, and every imaginable way of accessing these using leverage.
In fact, most investors are long-term investors: they want their spare, saved capital patiently invested for some time in the future when they need it back. The rules for long-term investing are quite different, and the returns should be substantially higher.
LIO can help you understand the differences; who you are, and how you can take maximum advantage of this knowledge.