Time Management?

Time Management?

Time is our most precious resource.

Source: Pixabay

We can’t make more of it, it’s difficult to manage, and everyone wants some of yours. We can try to stretch time, to enjoy an event or experience for longer, but the clock ticks relentlessly forward: time waits for no one.

When we’re investing, the length of time an investment can be held is the single most important factor to consider. Given enough time, risky investments become safe, and safe investments become risky. Over the last 30 years, risk-free T-Bills have averaged 3.3% per year—barely above inflation. By contrast, the S&P 500—with all its ups and downs–has grown 10.6% per year.

Source: Bloomberg

If your goal is to retire in 30 years, safe investments don’t help very much. But if you want to retire in 5 years or less, having all your money in stocks is foolish. There can be multi-year periods where you’d have to draw on the funds when the market is down.

Safe investments keep you from having to sell stocks after they’ve fallen—turning temporary price fluctuations into permanent losses. But the longest duration investments—those that in the short-run are the most volatile—are the ones that return the most over a long period.

Having an investment plan that takes time into account is critical to investment success. Because there’s always enough time, if we use it well.

Douglas R. Tengdin, CFA

Chief Investment Officer

By | 2017-07-17T12:22:25+00:00 October 9th, 2015|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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