There are some unanswerable questions when speaking to a lot of investors like the period of investing. When you are going to a bank to make a fixed deposit, so the only decision to make is the period of deposit. So, to inquire and get an answer to the investment time question is required.
When you have a month, a year, or even three years to save money, then equities are not the vehicle. Then, why would investing in equity only be done for the long term? Of course, the solution is to counter uncertainty. The returns are always fantastic over about five to six years, but the volatility is high. You may see low returns or even losses over any given short time.
There is a different way to look at it. The stock markets work in waves, and a complete period of dramatic growth, downturn and recession and back always takes five or seven years. We need to spend through the entire process to achieve the correct amount of returns. Within a year, or maybe two, it won’t happen.
These last couple of months have been a perfect example of how traumatic incidents are a part of stock investment. Long drift times will make us complacent about big, rapid drops. Earlier it was fine to invest in equities for more than three years. Then it slowly increased to five years, now five to seven years.
However, the terms of equity investment have also changed. Since 2007, unexpected and ultra-large shocks have achieved a new degree and universality. In all fairness, despite today’s world economic and market climate, investors should not spend 100% on investment horizons of less than seven years.
If you do so, it’s not as though you are going to face any disaster. It’s just that there are far higher odds of missing a portion of your winnings. When you are young, and you have a decent salary, go ahead with all possible means. The investment being radical or cautious is not just black or white, but shades of gray. This depends on you individually as well as on exterior circumstances.
