Ignore political rhetoric, says AUI
Investors have been urged to drown out pre-election market speculation that puts logical, long-term investment choices at risk.
Less than two weeks out from the Federal Election, the market is cluttered by politicians and commentators focused on short-term economic uncertainties, Australian Unity Investments (AUI) head of portfolio management Edward Smith believes. “Unfortunately, such commentary can get in the way of investors making sensible decisions about their long-term needs,” he added.
Smith said getting caught up in the excitement of rhetoric and promises could lead to poor decision-making.
“Investors need to learn not to be distracted or influenced by the sort of short-term issues that politicians usually focus on, such as economic predictions for next year or the year after, or even short-term regional issues,” he said.
“What pundits believe could happen in the next few years is typically already priced in financial markets. The rule of thumb is that if a statement or policy seems certain, then it has already been taken into account in the price of an investment.”
Smith said a more sensible approach would be to encourage investor optimism and diversified portfolios.
“Long-term investors need to ignore such actions and reactions, and shouldn’t feel any pressure to make quick market judgements themselves.”
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