NEWS AND VIEWS

Time in not Timing

08.06.2015

For century’s people have debated what asset class is best in the long term. You can imagine Genghis Khan wondering whether he would be better off with vast swathes of land, or herds of cattle, which one would bring the best rewards in
the long term?
Each asset class will have good times and bad times, there is no panacea, no Holy Grail which says invest in property, equity, vast swathes of land, or herds of cattle. Many years when I was growing up, the adage was buy property. We
have recently been through a series of slumps in the property market, and whilst even today sectors of that asset class have seen significant rises, notably London, certain sectors are still moribund. Choosing the right asset class is important. Past performance as they say is no guarantee for the future.
However most important of all is time in the market. The magic of compounding.To demonstrate the value of compounding - "Would you
rather have £10,000 per day for 30 days or a penny that doubled in value every day for 30 days?" Today, we know to choose the doubling penny, because at the end of 30 days, we'd have about £5 million versus the $300,000 we'd have if we chose £10,000 per day.
 


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