The lure of short-term gains

The lure of short-term gains

There are many strategies employed in the market. During a given period, any strategy may give a negative return, despite having delivered good positive returns in the past or over the long term. The investor maybe tempted to change a proven strategy.

An investor changed from fundamental investing, to technical investing, to warrants investing, to options investing and to investing in U.S. equities. These techniques spoke loudly the resourcefulness of the investor, but the success must await an honest revelation of the total returns. This was certainly bewildering to those who are less savy. Yet, it was both interesting and intriguing to follow the investing adventure of this investor.

Sometimes, the lure of short-run gains, the attraction of a new paradigm, and the relentless pressure to keep pace with hot sectors and hot stocks caused some/many investors to abandon their long-term principles. The long-term moderate rate of return is too slow for many who tasted the spectacular gains made in the bull market.

However, by accepting a modest return of 7 or 8% per year (doubling wealth every 10 years), there are many stocks giving such a return with low or no risk. Patience must be exercised by long-term investors. Stocks remain the best investment for all those seeking steady, long-term gains.