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Category: Investments Date: 7/31/2008 11:16:40 AM
You may be wondering if this is a good time to invest or where the stock market is headed.
If so, Edward Jones has some answers for you - the same ones we've always had.
Prudent investing depends on a strategy that includes buying quality equity investments and holding them for the long term - in other words, time in the market, not timing the market. Your strategy also should include diversification.1 Diversification involves investing in companies in different industries so that your success is not tied to a single industry's performance.
If you're concerned about investing in 2008, think about the reasons that kept others from investing in years past. Although past performance is no guarantee of future success, hesitation can be a costly decision. The table shows what £10,000 invested in common shares for the years noted would be worth today.
You can probably think of a reason not to invest in 2008. Instead consider this: A buy-and-hold strategy that emphasises diversification offers an opportunity to build wealth over time, despite short-term market fluctuations. It was true several decades ago, and it's still true today.
£10,000 Invested on 1 Jan.
Value Today2
1977
Global energy crisis
I'll wait until I know everything is OK.
£755,576
1982
Falklands War
Now is not the time for me to be in the market.
£274,173
1987
Black Monday
I was out of the market.
£81,593
1992
Sterling crisis, Britain drops out of the ERM
I'm afraid the economy will suffer.
£45,453
2001
Sept. 11
I'll wait out the war on terror.
£13,141
2003
Iraq War
I don't want to be in the market right now.
£19,602
2007
Credit crunch creates market volatility
I'm definitely holding on to my money for a few years.
£9,970
Sources: Global Financial Data, Bloomberg and Edward Jones
1 Diversification does not guarantee a profit or protect against loss.
2 Based on the FTSE All-Share Index. Assumes reinvestment of dividends. Ending values as of 30 April 2008. The FTSE All-Share Index is an unmanaged index and cannot be invested in directly. Past performance is not an indication of future results. Figures do not include fees or commissions, which would have a negative impact on investment results.
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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at anytime.
