Anyone who reacts impatiently and hastily to bad news when investing can end up costing themselves their returns. Because reshuffling holdings unnecessarily drives up transaction costs. After all, it's proven that on average, the return on equities beats both the return on short-term money-market investments and that of long-term bonds. In other words, the risk premium is a reward for the higher risk associated with investing in equities.
When it comes to investing, the same rule applies even in turbulent times: stay the course!
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And how?
quirion pursues the idea that a conscious approach to risk opens up the greatest opportunities for successful investing. quirion's foremost goal is to systematically minimise the risks of investing. Part of this means that quirion invests clients' assets, via ETFs and index funds, in more than 8,000 companies across more than 70 countries, in all sectors and currency areas. With this maximum possible spread, investors hold stakes in all the relevant companies worldwide. Fluctuations in the portfolio may not be entirely avoidable, but with the right concept they are easy to bear even in stormy times.
The reality check
The stock market's performance in the first quarter proves how important it is to correctly gauge your risk appetite for your own investments. While the Dax was still able to soar to a new all-time high in January, it subsequently showed its weaker side. Within two months, the German benchmark index lost around 1,800 points. The scenario of a looming trade war, the open questions over Brexit, the Facebook data scandal and the strikes in Syria did nothing to ease investors' minds. The flash crash of 5 February, when the Dow Jones index closed down 4.6 percent, illustrates investors' nervousness and plays right into the hands of stock market gurus.
Regardless of negative headlines on current political and economic topics, investors shouldn't let themselves be unsettled. Instead, they should put their trust in a forecast-free strategy that is scientifically grounded and globally diversified, harnessing the available opportunities of the capital markets to make an attractive long-term return possible.
