The USA and global stocks rally: why deVere believes in long-term investing

U.S. and global stocks are again rallying due to a wave of optimism ahead of this week’s U.S. and China trade talks.

All the major U.S. indices started the week’s trading with multi-month highs as the Beijing delegation prepares to sweep into Washington on Wednesday in a bid to solve its ongoing trade dispute with the USA.

The Dow Jones rose 61 points to 25,735, a gain of 0.2 per cent. The S&P 500 were up 5 points to 2,856.50, a gain of 0.2 per cent. Whilst the Nasdaq increased by 22 points, or 0.3 per cent, to 7,410.

This upward swing follows mainland China’s indices rallying from two-year lows today, Hong Kong’s Hang Sang rising by 1.4 per cent, and both the European-wide Stoxx 600 and the UK’s FTSE gaining 0.6 per cent.

This comes on the back of U.S. equities jumping sharply last week on indications of better trade relations between the world’s two largest economies, as well as signals of improvements in Turkey’s currency market.

It has, therefore, been a positive week or so for many investors who are invested in the USA and other global equities as part of a balanced and diversified portfolio – which is widely recognised as one of the best ways to accumulate wealth over long periods.

Of course, no-one has a crystal ball and stock markets are always fluctuating. However, over the longer-term their performance is indeed fairly predictable – they usually go up.

As such, if you put off investing you are likely to miss out on the long-term benefits you could have been gaining.

In a deVere poll carried out two years ago, 20 per cent of the high net worth individuals who we surveyed said that one of their biggest investment errors was thinking in the short-term.

At deVere, we share this belief that short-term investment strategies are usually disadvantageous because this kind of approach typically involves considerably higher risks, compared to investing over a longer period.

Other risks of such a stance include that investors can often sell a quality investment too early because of over emphasis on short-term valuation metrics. Or, on the flip side, they can sell an investment if it drops in the short term, meaning that they would then miss out on it potentially growing steadily in the longer term with increasing returns.

And whilst it is now something of a cliché, the saying that it is all about ‘time in the market, not timing the market’ has led and continues to lead many people to financial freedom.

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