Market Drawdowns

Market Drawdowns

Overview

As the profit cycle matures, we are increasingly being asked how long-term investors should best position themselves should the economic backdrop and equity markets become more challenging. As the profit cycle matures, we are increasingly being asked how long-term investors should best position themselves should the economic backdrop and equity markets become more challenging.

Key points


Markets mark-to-market in the short term and are inefficient in the long run.

 

The impact from the compounding of cash flows outweighs the potential impact from valuations.

 

Consistent and stable cashflow growth is an important cushion to protect and preserve value through a downturn.


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 Simon Steele

By Simon Steele
Head of Global EquitiesSydney, Australia

Important note: While every care has been taken in the preparation of this document, AMP Capital Investors Limited (ABN 59 001 777 591, AFSL 232497) and AMP Capital Funds Management Limited (ABN 15 159 557 721, AFSL 426455) make no representations or warranties as to the accuracy or completeness of any statement in it including, without limitation, any forecasts. Past performance is not a reliable indicator of future performance. This document has been prepared for the purpose of providing general information, without taking account of any particular investor’s objectives, financial situation or needs. An investor should, before making any investment decisions, consider the appropriateness of the information in this document, and seek professional advice, having regard to the investor’s objectives, financial situation and needs. This document is solely for the use of the party to whom it is provided. © Copyright 2018 AMP Capital Investors Limited. All rights reserved.

 

Original Source: Produced by AMP Capital Ltd and published on 30 August 2018.  Original article. 

 

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