Long-term investing – for professional investors
Nothing is more mis-understood in investing, than the importance of timeframe, and your liquidity requirement.
There is a fundamental difference in short-term and long-term investing that is well understood by insurance companies, pension funds and endowments.
Unfortunately, financial markets are generally set up to sell products to investors. Investments are designed and marketed using sophisticated techniques. Real-time prices, graphs, colours and flashing numbers grab our attention. Short-termism rules. ‘Star managers’ are feted when succeeding, but rubbished after a period of failure. Investment professionals, effectively media personalities, are regularly interviewed to tell us ‘what will happen’ to markets, assets, currencies and countries.
The reality is this: no-one knows where individual markets or assets will go. Yet the financial services industry promotes false certainty and encourages short-term behaviour, because the industry benefits from maximising turnover.
In fact, most investors are long-term investors: they want their carefully raised 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.