half-year financials, page-89

"A long term investment is just a short term investment that failed"

Perhaps the problem lies with the investor who naively expects to succeed in the short term. The highly experienced financial journalist and author, Barrie Dunstan, finished writing his regular column for the Fin this week. Just over a week ago he reflected on short-termism in the markets,

Perhaps the biggest problem in investment markets is short-term thinking and behaviour, and it’s a universal worry, as shown by the recent major review of equity markets in the UK by economist professor John Kay.

Many of Kay’s findings are highly relevant to the Australian market, says Equity Trustees’ chief investment officer, Shaun Manuell, and he says investors who continue to focus on short-term volatility are bound to damage their long-term wealth strategy.

In Dunstan's last column this weekend he reflects on what he has learned from over 40 years of involvement in the stock market.

He quotes Fidelity Australia head of equities, Paul Taylor,

"You can't get too emotional about investing. If you can't take things going wrong, you shouldn't be in the investment business."

And, naturally, he quotes Warren Buffett,

"If you don't feel comfortable owning something for ten years, don't own it for ten minutes."

"Unless you can watch your stock decline by 50% without becoming panic-stricken, you should not be in the stock market."

It is, indeed, a matter of perspective.

http://www.afr.com/p/personal_finance/portfolio/short_term_focus_needs_to_change_JJTYtgoTP1Wn4DmieWsDhN

http://afr.com/p/markets/market_wrap/learn_to_be_less_wrong_and_more_fvqQAPOaAN2kO6CQKYMapI