The Firm believes diversified portfolios of the stocks of companies meeting its quality - growth criteria, purchased at reasonable prices, offer superior risk -
adjusted returns over the long term.
However, only if you invest using a system with a high probability of market
beating returns over the long term do you have a high probability of being a successful investor.
In my experience, investors generally accept that equities are volatile, and they are willing to endure big swings because they know they can expect
meaningful returns over the long term.
Knowing that the data suggests that the stock market provides
regular returns over the long term inspired me to split my investment between a mutual fund and a group of individual stocks.
This investing approach seeks to blend the best aspects of traditional «deep» and «relative» value strategies, aiming to generate attractive, sustainable, low -
volatility returns over the long term while minimizing downside portfolio risk.
My point is simply that it's very likely that if you are moving money in and out of stocks based on volatility, you're much less likely to get the full
market return over the long term, and might be better off putting more weight in asset classes with lower volatility.
Other important factors to consider include the fund's objective and strategy, cost, and pre - and
post-tax returns over the long term, along with the investor's personal objectives, time horizon, and risk tolerance.
If, for example, you retire early and expect to live into your eighties, you might allocate a portion of your RRIF to higher risk investments (such as equities) to take advantage of the higher
potential returns over the long term.
That's why investors who are still many years from retirement should welcome a modest increase in interest rates: it would cause some short - term pain, but it would also mean higher
bond returns over the long term.
Since the fund rebalances its leverage on a daily basis, actual returns can significantly deviate from expected
returns over the long term due to compounding effects, so XPP is meant as a short - term trading vehicle.