Investment management - The importance of a long term vision

By Mattioli Woods

17 Sep 2014

This is a time of increased volatility in world stock markets and being focused on a long term investment management strategy isn’t always easy.

By Glynn Bartley, Taylor Patterson.

However, when you consider the performance of major asset classes over the long term some key philosophies can help investors keep long term investment success clearly in sight.

Building an investment strategy aligned to an appropriate risk profile provides a solid platform for investors to achieve their goals and expectations. Research shows that the key to long term investment performance is effective asset allocation with less focus on market timing or stock selection. Market cycles play out against a backdrop of economic, social and political change and many investors become tempted to react to every turn of events.

Markets are unpredictable and trying to time them means investors must get two important decisions right: when to get out and when to get back in. Historical market returns show that investors who remain invested often do better than those reacting to every event.

Diversification can help reduce volatility and smooth out returns over time. This often starts by investing across asset classes and also by investing in different companies, industries and countries. Whilst this strategy does not protect a portfolio against negative returns, it does reduce the impact of poorly performing asset classes.

By overlaying an effective asset allocation with tactical investment decisions volatility can be further reduced. This is where a portfolio goes under or overweight in a particular asset class or sector depending on the outlook. For example, most portfolios will be limiting exposure to UK government gilts as they are particularly sensitive to interest rate movements and any increase can adversely affect prices.

There are a few basic rules to investing in volatile markets, where you need to raise cash in the near term, consider doing this sooner rather than later; where you are considering investing cash then consider spreading the investments over a period of time. Both actions guard against you losing out should markets move against you in the short term. This may appear overly protective but it has been proven that investors react more from losing value than gaining it through investments.

Therefore, it is important for investors to protect their downside even if it means missing out on some of the upside. According to Bloomberg, the VIX index, often referred to as the fear index, measures the implied volatility of the S&P 500 index options in the US. Although, volatility has been increasing it is still relatively low. This is a similar story in the other major markets all wary of the risks to economic recovery from events in the Ukraine, the Middle East and the likely impact of rising interest rates. At Taylor Patterson, our investment management strategy is designed to capture the long term returns expected from investment markets whilst balancing, understanding and mitigating the risk that volatility can cause discomfort in the short term.

Latest news

1

VARS Technology team up with debt resolution specialists to fight fuel theft David Nichol John Garnett Aydan Jones and Laura Tilley

VARS Technology team up with debt resolution specialists to fight fuel theft

12 Sep 2025

2

University of Lancashire unveils Preston campus installation to celebrate name change University of Lancashire new feature

University of Lancashire unveils Preston campus installation to celebrate name change

12 Sep 2025

3

PM+M welcomes ten new apprentices for 2025 intake Lucy Field, Kate Walsh, Ellie Fisher, Zainab Aswat, Reece Jones, Aisha Bibi Patel, Finley Vila, Uzair Zariwala, Richard Prest, and Charlie Harrison

PM+M welcomes ten new apprentices for 2025 intake

11 Sep 2025

4

ROCCIA strengthens commercial division with senior appointment Andrew Grove

ROCCIA strengthens commercial division with senior appointment

11 Sep 2025

5

Final call for investors: Rossendale community solar project must hit target by November Gary McEwan managing director of Interfloor

Final call for investors: Rossendale community solar project must hit target by November

10 Sep 2025

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
Sub36 Networking - Follow the signs
Sub36 Deaf Village Social1200
Networking
17 Sep 2025

Sub36 Networking - Follow the signs

The Deaf Village, Blackburn, BB2 5EN

10:00 - 12:00

LBV124 September/October Launch Event
MBP Arc Cinema Preston Opening 205
Networking
18 Sep 2025

LBV124 September/October Launch Event

The Arc Cinema, Preston, PR1 2BL

08:30 - 10:30

CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

Longridge Soap Box Derby
Screenshot 2025-06-10 090035.png.png
LBV Hub Fundraisers
14 Sep 2025 - 14 Sep 2025

Longridge Soap Box Derby

Berry Lane, Longridge, PR3 3WH

10:00 - 16:30

Preston Tech Connection - The Ultimate Tech Quiz!
Preston Tech Connection Sept 25.png.png
LBV Hub Networking
16 Sep 2025 - 16 Sep 2025

Preston Tech Connection - The Ultimate Tech Quiz!

Society1, Coworking Space, Preston, PR1 3LT

18:00 - 19:00

The Business Network Central & East Lancashire
LBV Hub Networking
17 Sep 2025 - 17 Sep 2025

The Business Network Central & East Lancashire

Stanley House, Blackburn, BB2 7NP

11:30 - 14:15

Cumbria Business Expo 2025
https---cdn.evbuc.com-images-880461633-4862066883-1-original.20241022-110415.jpeg.jpg
LBV Hub Exhibitions
19 Sep 2025 - 19 Sep 2025

Cumbria Business Expo 2025

Carlisle Racecourse, Carlisle, CA2 4TS

09:00 - 15:00

Your Business, Your Region: Making sense of devolution and Local Government Reorganisation
Chorley Council breakfast event new
LBV Hub Networking
23 Sep 2025 - 23 Sep 2025

Your Business, Your Region: Making sense of devolution and Local Government Reorganisation

Worden Hall, Leyland, PR25 3DH

08:00 - 11:00

Preston Freelancer Meet-Up: September
Sept Freelancer (1).png.png
LBV Hub Networking
23 Sep 2025 - 23 Sep 2025

Preston Freelancer Meet-Up: September

Society1, Coworking Space, Preston, PR1 3LT

10:00 - 11:30

Speed Networking with BNI
2.png.png
LBV Hub Networking
24 Sep 2025 - 24 Sep 2025

Speed Networking with BNI

Chorley Football Club, Chorley, PR7 3DU

16:00 - 19:00

The Marketing Meetup IRL: Lancashire - September
TMM Lancashire
LBV Hub Networking
25 Sep 2025 - 25 Sep 2025

The Marketing Meetup IRL: Lancashire - September

Chorley, PR7 2SL

18:00 - 20:00

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV 123 Online Graphic
Subscribe now

Weekly news bulletin