In the last of his quartet of bite-sized Assemblies on investing, Timeline investment strategist, Laurentius van den Worm, tackles the topic of market forecasting.
Given our recent experience with high inflation, higher interest rates not to mention pandemics, wars and conflict, is there much point attempting to forecast the future?
Or put another way: what’s the outlook for forecasting (geddit? 😉)
Tune in and you’ll soon discover that Laurentius thinks three things are worth remembering:
First, active managers rarely outperform the market long-term. Investors should get low-cost market exposure rather than try to beat it.
Secondly, missing just a few of the stock market’s best days over decades can seriously affect overall returns. Timing the market is extremely difficult, so investors should stay invested.
And finally, equities have created significant wealth over the past century and remain an essential feature of long-term financial plans.
What’s more fixed income can help reduce volatility (and traditional asset allocation still makes sense despite recent volatility).
The takeaway? Long-term historic trends remain a pretty sound basis for forecasts despite recent volatility. And equities tend to reward patient investors with long time horizons.
Rather than market timing, appropriate asset allocation and risk management enable investors to endure short-term swings.
But don’t take our word for it. Listen yourself now.
Listen now
By loading the tweet, you agree to Twitter's privacy policy.
Learn more
Missed out on previous episodes?
Catch up now with the first three episodes this bite-sized Assembly series.
Part 1: On modern portfolio theory. Laurentius explores modern portfolio theory’s key principles – like diversification and concepts such as the ‘efficient frontier – illustrating the topic with practical examples.
âž” Watch now
âž” Listen now
Part 2: On asset allocation. Join Laurentius as he explores the topic of asset allocation, asset classes, diversification of risk, real estate investment, and performance of real estate investment trusts compared to global equities.
âž” Watch now
âž” Listen now
Part 3: On sequencing risk. Laurentius brings the issues of sequencing risk to life by using an example of two sisters with equal returns but different retirement income due to market loss timing. (And explores essential concepts along the way too.)
âž” Watch now
âž” Listen now
About Laurentius van den Worm CFA
Laurentius joined the Timeline Investment team in January 2022 after moving to the United Kingdom from South Africa. He serves as an investment strategist who oversees the fund research and selection, asset allocation and portfolio construction functions in collaboration with the CIO.
Laurentius has seven years experience in the South African investment markets. In his previous role, he served as an investment analyst and financial consultant in the wealth management industry in South Africa, where he gained experience in various financial activities, including portfolio management, investment research, financial analysis, and wealth management.
Laurentius holds a Bachelor of Commerce degree in Investment Management and a post-graduate diploma in financial planning from Stellenbosch University. He obtained his CFP® designation in South Africa in 2017 and is CFA Level 3 qualified in the UK.
