Why slow and steady often beats ‘hype’ when it comes to investments’

Over 12 months ago we made the case that long-term investing beats chasing speculative quick wins, and now, a year on, some of the numbers back us up.

The FTSE 100 has performed well over the past year, gaining close to 20% over the past twelve months and pushing through the 10,000-point mark for the first time in its history.

What would that have meant for an investment? Put simply, £1,000 invested in a fund tracking the index around this time last year would be worth about £1,200 today. Some nice and steady gains there.

Compare that with more speculative investments built on hype, like Bitcoin. A £1,000 of Bitcoin bought a year ago would now be worth somewhere around £550-£600. Less than half its starting value!

There’ll always be outliers of course, but it helps to demonstrate that structured, diversified, long-term portfolios definitely remain the more reliable route to real financial freedom.

Chasing the hottest ‘in’ trends you can see on the likes of social media can pay off, but any gains can just as easily be wiped out in a single bad week. That’s the nature of speculative, momentum-driven investing: it’s great on the way up, but not so good on the way down.

So while a diversified, long-term approach may not offer instant gratification, the evidence is that patient investors are consistently rewarded.

If you’re in the fortunate position of having some available funds and are wondering whether now is the time to invest, or perhaps thinking that your existing portfolio may not be working hard enough for you, we offer a free, no-obligation consultation to talk it through at any of our offices, located in Douglas, Port Erin and Ramsey.

Important Information: This article is for general information purposes only and does not constitute personal financial advice. The value of investments and the income from them can go down as well as up, and you may not get back the full amount invested. Past performance is not a reliable indicator of future returns. If you are unsure about the suitability of an investment, please seek professional advice.