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.
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