Investors benefit from "diversification and time"

Thu, 13 Dec 2007

Investors are likely to benefit from greater levels of diversification and taking a long-term approach, one expert has suggested.

Jason Butler, a partner at Bloomsbury Financial Planning, said that for long-term investments it makes little difference whether a market is "imploding or exploding".

"Diversification and time are your two friends. If we knew that returns were certain there would be no extra returns for investing in risky assets," he commented.

Markets are never "certain" and so they do experience periods of "instability and lack of confidence", Mr Butler explained.

However, it is not worth worrying about short-term developments if an investor is taking a long-term view, he added.

In related news, a recent survey by Barclays Wealth revealed that 40 per cent of independent financial advisers questioned by the firm suggested that market volatility would continue for between six and 12 months.

A further 17 per cent predicting that financial turmoil would last for another year.
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