AUSTRALIA - The current crisis affecting the world's financial markets and institutions should not deter institutional investors from holding firm with their investment strategies, according to analysts from Russell Investment Group.
He demonstrated that, in each of these cases, despite negative short term outlooks, equities had consistently outperformed bonds over time, pointing to the value of a long term strategy and a diversified portfolio.
Wood said: "What we have is fear masquerading as formal analysis. Investors with a long term investment focus should not be as concerned about this market, despite pundits' protestations to the contrary.
"In hindsight, over relatively short periods, there will always be asset classes that appeared strong and others that seemed weak. History shows that even the scariest markets of the last 77 years did not derail long term market probabilities."
According to Wood, 'true' portfolio diversification based on investors risk profile and not trying excessively to time the markets offered the best long-term potential.
He said: "In truth, there is no guarantee that the seemingly 'great' performers will not become weak, and vice versa, from one period to the next."
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