InvestSMART's Performance for the month of January
International Equities Portfolio
Property and Infrastructure Portfolio
January was a month that demonstrated why timing the market is a fool’s game. Despite the doom and gloom, the ASX 200, represented by the ETF IOZ in our portfolios, jumped 6.29% in the month. It’s the best start to a calendar year in the history of the ASX 200. Importantly, January’s increase saw the losses on the ASX 200 in 2022 recover.
This is an excellent example of sequencing risk. Sequencing risk is the order in which returns happen. We do not know when these exuberant months will occur, nor the negative ones, but we do know markets revert to their long-term averages over time. So by jumping in and out of the market, you’re more likely to miss out on these good months to buy back in at higher prices.
The aim of the InvestSMART Investment Committee, Chaired by Paul Clitheroe, is not to predict market movements and avoid the negative. Instead, it is to ensure our portfolios remain in line with the stated risk profile and, with the benefit of industry-low fees, exceed the average return of each portfolio’s peer group. Plainly put, we want our performance to beat the average return of your other investment options in each category.
How can you tell if we do what we say we will?
Look at the performance chart of each portfolio, and you’ll see our performance compared to the peer group average. It takes time for our capped fee difference to compound, but when it does you see the gap grow.
You’ll also see ups and downs, but you’ve got to take the good with the bad to achieve the long-term returns. So stay focused on your goal, don’t let the bumps deter you and reach out to the team if you need a hand.
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