After several years of poor performance, shares are exhibiting good value, particularly against record low bond yields and low and falling cash rates. Against this, the investment backdrop remains as messy as it’s ever been over the past few years. Europe is continuing to muddle along with many fretting it will blow
apart. The US is going through a soft patch with concerns about a ‘fiscal cliff’ later this year. Key emerging countries have also slowed.
While the Australian economy is doing better than many, the share market seems to be exposed to parts of the economy that aren’t doing well. As disappointment piles on disappointment and the years roll by it is no surprise investors are starting to give up and focus on preserving capital as opposed to seeking growth. Given this, is the “stocks for the long term” approach still valid?
Are long term investors right to sit tight?