2016 Investing For Long-Term Capital Growth

2016 Investing For Long-Term Capital Growth - September 2016

Issue 24

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Investing For Long-term Capital Growth - September 2016

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Coronation Insights

Coronation Insights

Investors looking to achieve long-term capital growth have one great advantage − time. Money invested generates returns that can be reinvested to achieve further returns (this process enables compound growth). Given that compounding is an exponential rather than a linear function, the longer investors have to invest the greater the possibility of dramatically multiplying their purchasing power. When investing to fund a retirement, investors’ investment horizons are measured in decades rather than years. This makes optimal decision-making counter-intuitive to the short-termism that drives most market participants.

This issue looks at why we believe a long time horizon is the most reliable investment strategy for investors looking to achieve above-average results. We outline investment concepts that drive investor outcomes over the long term, discuss the importance of asset allocation and diversification, and consider the implications of our long-term return expectations on a typical balanced fund. Finally, we present our range of long-term growth solutions aimed at meeting the needs of different investor profiles.