The following is taken from an article by Ian Cowie, writing in the Money section of the Sunday Times this weekend, I thought you might find its central message reassuring:
“Short-term stock market shocks are very harmful for day traders or speculators but need not necessarily matter much to medium and long-term investors. At times like these, it may pay to remember that shares reflecting the changing composition of the London Stock Exchange delivered higher returns than cash over three-quarters of all periods of five consecutive years since 1899.
In plain English, that means if investors could hang on for five years, they had a 75% chance of beating bank deposits, according to comprehensive analysis in this year’s Barclays Equity Gilt Study. Despite much worse setbacks than the current crisis — such as the Great Depression and two world wars — shareholders who remained invested for a decade had a 90% probability of beating deposits.”
Here is the link to the full article:
As always, if you have any questions on this subject or indeed on any other finance related matter, please do not hesitate to call me.
With kind regards,
Graham Ponting CFP Chartered MCSI