Markets:the “fundamentals”

Recent events on shaky world markets offer lessons for all investors.

But just what are those lessons? That is a question of some importance, right now.

Australia’s Investment and Financial Services Association has stepped in to offer some answers.

Its CEO, Richard Gilbert, says:”Investment markets move in cycles.

“And it is impossible to predict when a market will rise or fall.

“However, by looking at the past we can observe how markets usually perform.

“And that can help us to put market movements in perspective.”

His association has produced a pamphlet, which it called “Four Lessons from the Market.”

Summarised, they are:-

1. Markets move in cycles
2. Diversification reduces risk
3. Look at ‘time in the market’ not “timing the market” and
4. Start investing early, save regularly

It’s all a bit general, of course. And the old song, As Time Goes By, summarised much the same thoughts, very elegantly, many years ago. The key line in that song is unforgettable:-

“The fundamental things apply, as time goes by.”

Markets, after all, are just one more human relationship.

Naturally, there is a bit more to IFSA’s pamphlet, than we have been able to record here.

You can get the whole thing from www.ifsa.com.au