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Short-Term Investing Can Be Risky
20 Mar 2020
Is Sitting in a Money Market Fund Aligned with Your Long-Term Investment Goals?
“Buy low and sell high” is a familiar mantra of investors everywhere. But in these days of uncertain markets, attempting to time the market – buying before the market heads upward and selling before a downturn – is a risky proposition at best. On the other hand, an investment strategy that has historically done well is staying invested for the long term. Stock rallies tend to occur in short bursts, so missing out on a few days of being invested in the stock market could mean missing out on potential substantial gains.
Value of a Hypothetical $1,000 Investment in the U.S. Equity Market from 1988-2019
Source: FactSet Research Systems, Inc. from 1/1/88 – 12/31/19. U.S. equity market represented by the S&P 500® Index
The example provided is hypothetical and used for illustration purposes only. It does not represent the returns of any particular investment and includes the reinvestment of dividends. Does not include the deduction of fees or expenses.
Each of these bars represents the value of a hypothetical $1,000 investment in the U.S. equity market over a 31-year period. The differences among them reflects small pockets of market rallies in which the investor did not participate.
For example, if an investor missed only 10 of the market’s best performing days, the investor would have a total value of $13,237, over 50% lower than the $26,524 portfolio value of an investor who remained continuously invested for the entire 31 years.
On the sidelines or invested for the long term?
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Unlike many moderate allocation funds that are constrained by static targets, the Fund may hold between 35% and 65% equities depending on market conditions. Leveraging an active asset allocation strategy, the Fund aims to defensively position ahead of anticipated market volatility while seeking strong risk-adjusted returns.
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Our team of real estate experts combines a boots-on-the-ground presence with in-depth market knowledge, seeking to create a truly active, high-conviction portfolio.