Are there benefits to being a “sleeping beauty” investor?

Orbis Investments

What would have happened if you'd slept through the past two years?

If you were a global investor, you would have missed out on a difficult 2018, when global equities ended the year down 9%. You would have also missed a resurgent 2019, over which the MSCI World Index returned 28%.

On waking up, you'd have discovered that, over the period, your portfolio had delivered an annualised return of 8% - not too bad considering the negative headlines in 2018. Not outstanding, either, given the boom reported in the following year.

As this piece by Orbis Investments notes, the approach of "sleeping through it" would have some "powerful behavioural advantages" inasmuch as you'd be less susceptible to short-term market noise. But it's only half the story, as sleeping through a different period in markets would yield a very different result.

If you read this Orbis Investments article, you will learn:

  • what "sleeping through" markets would mean over different periods
  • what drove equity returns through 2018 and 2019
  • why it's helpful for clients to ignore market noise - but pay attention to valuations

 

 


The opinions expressed in this content are those of the author shown, and do not necessarily represent those of No More Practice Education Pty Ltd or its related entities. All content is intended for a professional financial adviser audience only and does not constitute financial advice. To view our full terms and conditions, click here

  •  
Liked this article? Let us know [likebtn theme="drop" dislike_enabled="0" icon_dislike_show="0" position="top"]

Want more of the latest in opinions, expert insights and training?

Subscribe to our free eNewsletter now

/ Related content

Where are the next big opportunities in tech? 

Should you be investing in the world's biggest tech companies, or is thi....

What do past bear markets teach us about investing today?

A bear market can seem frightening to clients. But looking at the past c....

What are investors missing from the coronavirus crash?

With markets taking a serious beating due to the coronavirus pandemic, i....

Leave a comment /

Related content /

22 July, 2020

Orbis Investments

Where are the next big opportunities in tech? 

Should you be investing in the world's biggest tech companies, or is this another dot-com bubble?

Read now

02 April, 2020

Orbis Investments

What do past bear markets teach us about investing today?

A bear market can seem frightening to clients. But looking at the past can give us better perspective on the present.

Read now

19 March, 2020

Orbis Investments

What are investors missing from the coronavirus crash?

With markets taking a serious beating due to the coronavirus pandemic, it's worth considering what might be getting lost in the noise.

Read now