Richard Cayne Meyer International Ltd - Investing For the Long Term

Richard Cayne at Meyer International in Bangkok Thailand says volatility in the markets is predictable in that we know there will be volatility so learn to accept and understand it.  As a disciplined saver or investor (whatever you choose to call yourself) you simply must keep a view on investments over a long horizon.  The reason you must keep the long view is not so you ignore the present and put your head in the sand, and it’s not me telling you to “just hang in there”;  it’s so you don’t do what so many other unguided individuals have done in the past: failed to recognize that a well-managed equity portfolio will return 10% or greater on an average annual basis over any 10 year or longer period, and so you don’t guarantee yourself losses by buying high and selling low.  Unfortunately, most people end up buying high and selling low. 

Richard Cayne Meyer Asset management Ltd points out that over various research papers the study of investment results from 1991 through 2010, that the “average equity investor” realized an average annual total return of 3.8%, while the Standard and Poor’s 500 Composite Index provided an average annual total return of 9.1%.  A $100,000 hypothetical investment in the index would have grown to about $575,000 during that time, while this same investment would have grown to about $212,000 for the investor.  The difference in returns is largely attributable to investors getting in when times are good, and selling when times are bad-essentially buying high and selling low.  This “behavior gap” is the reason that during the gravy years for the Fidelity Magellan Fund, when it was under Peter Lynch’s management, the fund increased in value by an average of 29% annually, yet the majority of fund owners lost money.  The reason being is that they responded emotionally to what they saw going on around them; they bought high and sold low.

Of course one still needs asset selection that uses the right funds.  As Richard Cayne advocates all the time, even though we are required in the business to say “past performance is no guarantee of future results”, the reality of investment business is that past performance by a money manager is by far the best predictor of how that manager will do in the future.  Of the tens of thousands of mutual funds in the available universe, a small percentage, in any asset category, meet our standards for consistent, long term performance and capital preservation; and you need both.  There is no rule, no regulation, which says a fund, has to be good to be in business, and many are simply not good.

So hang in there and keep focus on your long term goals and objectives says Richard Cayne Meyer International Ltd. 

Meyer International Ltd based in Bangkok Thailand along with Meyer Asset Management Ltd form part of the Meyer Group of companies which is wholly owned by Asia Wealth Group Holdings Ltd which is a London UK listed Financial Holding company.  Richard Cayne Managing Director of the Meyer Group has lived in Asia for over 17 years with the majority of his time living in Tokyo Japan consulting high net worth Japanese individual and corporate clients on offshore financial planning, investment and structuring matters.

Article Source:- http://richardcaynes.wordpress.com/2012/09/08/richard-cayne-meyer-international-ltd-investing-for-the-long-term/