Rome wasn’t built in a day. In the last 20 years, growth assets like shares and property have averaged between 7% and 8%. Sure, there are some companies that have done much better than this, but you only know this after the fact. It wasn’t a given that Amazon would go from an online bookstore in 1994 to the global store that sells everything.
Be patient and invest for the long-term. Don’t put your money in high risk assets if you need it in two years for your house deposit.
Risk and likely returns are directly related. If there is an expectation of higher returns, it is because there are more potential risks with it. If there weren’t any risks and the higher returns were pretty much guaranteed, everyone else would be investing in it and the cost of buying it would be higher.
Do your research and if it sounds too good to be true, it probably is.
Don’t try to pick the market
One of the most frequent questions I get asked is “is now a good time to invest”. The answer is always a yes, especially if it is a long-term investment.
Over the last 20 years, there have been some significant events including the second Iraq war, the Global Financial Crisis, Brexit, the Japanese tsunami, and more recently COVID. Some of these events have had a big impact on share markets and some have had hardly any impact at all.
After the Global Financial Crisis it took the Australian share market nearly 5 years to get back to the high of 2007, but for most other events, including COVID, it was back to the highs within a few months.
Just do it
The single biggest mistake people make is they don’t invest at all, or they wait for ‘the right time”. Not investing will lock you into having to work until you can access your super, or in the worst case scenario, when you are old enough to get the aged pension. Taking inspiration from the Nike slogan and just do it.
I specialise in helping people make the most of their money, and love talking about investments. If you want a hand to sort yours out, book a chat via the button below or contact us on 0417 034 252 or at firstname.lastname@example.org.