The Benefits Of Taking A Long-Term View

- John Green

In a world of instant gratification, short-termism is a growing problem – it manifests in our investment behaviour and has grave consequences not only for retirement outcomes, but for capital markets and economic growth as well.

It is easy to see how we got here. We’re faced with increasing amounts of information overload – always on and always available. Added to that, it is not always simple to distinguish between what constitutes credible information and what is “fake” news. Furthermore, we have improved access to investment values and a proliferation of investment choice. The result is that anyone who has a responsibility to manage an investment portfolio – be that as professional investment manager or individual saver – is continuously questioning their investment decisions and being pushed to implement change in response to new information.

The consequences – on which there is unusual consensus from both academia and the industry – are threefold: savers are missing out on returns, companies are missing out on additive investment opportunities, and society is missing out on long term growth.