It’s about Long-Term Growth

If you watch CNBC with any regularity, then you likely find it laughable the frequency with which “market bottom” is mentioned these days. It seems everyone and his or her brother has an opinion on whether we have already hit such a milestone or when such a point may be reached in the near or not-too-distant future. The reality, of course, is that no one knows and market timing is, and always has been, a futile endeavor. Those who invest for the long-term are the ones who ultimately see portfolio growth.

Of course, in a market downturn like that which we have seen over the past several months can frustrate, and possibly scare, even the most savvy investors. The loss of more than 50% in some portfolios in a matter of months may mean that those same investors will spend the next decade (or two) rebuilding their portfolios just to reestablish the wealth they had only weeks ago. Wouldn’t it have been great if you had someone on your side with a long-term mindset that could help you make sense of this volatility?

Capital preservation has become the keyword of late and investment firms that have been preaching steady, but sustainable, growth are now in the spotlight. Firms, like Invested Interests have been advising their clients on the selection of companies with management that share this same theology. Just as these management teams have their own compensation packages tied to the long-term performance of the companies they manage, Invested Interests and other such firms have shied away from the flash-in-the-pan tactics that many high-flying hedge fund firms have taken with a commission-based model. It’s simply common sense: a flat-fee structure ensures that your investment advisor shares your interest – building long-term growth rather than trying to cash-in on interim market spikes.

We’re all human and we are all tempted by the seemingly instant recent profits generated by some firms during the boom times. The reality, of course, is that the same media that made such fanfare of the record breaking gains don’t like to talk about the losses these same firms are making now: it just doesn’t make for enticing news. Similarly, investors who have been making steady single-digit returns over the past few years and continue to do so in these turbulent times are not likely to make the headlines. The question to you, as an investor, is, of course: in which group would you like to be today?

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