Over the very long term, returns should be high if starting valuations are low: valuations tend to revert to the mean. Second-guessing short-term market movements, however, "is a mug's game", says the FT's Hugo Greenhalgh. Don't get panicked by a sudden dip and sell out in the hope of returning when things improve. Markets' default direction is up, and they can bounce back very quickly after a slump. If you had missed the FTSE All-Share's best 30 days in the past two decades, your portfolio would have lost money over the period. But if you had just sat tight, your initial stake would have tripled.
Viewpoint
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