When it comes to securing you and your family’s future, a long-term mindset, not a casino one, is your best friend
One second, we know where we are with tariffs; the next, not. One week we know that the future is AI, and all our money needs to be in the LLM creators and data centre builders; the next, we are all spooked, it’s a Bubble, and we need to pull out to avoid losing everything. And at least three times this year already Wall Street has had a ‘SaaSpocalypse’, where the second an AI company claims a new wrinkle is good at, say, legal things, then the market dumps everything connected to makers of legal tech.
Same old same old
Rinse, repeat. The stock market can be a very fun place if you have nerves of steel and the soul of a gambler, yes, big returns get made on ‘the dip’ every day by day and Reddit traders. But if you see investing as a casino, while you can for sure make a killing now and again, you can just as soon lose all your winnings—and your capital too. A chart of wild oscillations is the very last thing the serious builder of value wants to see.
Why? Is that because they’re boring? Too safety conscious, wanting to be in the mediocre middle of the herd? Possibly—but more likely, they understand that this is a long game, and that the best and more bankable returns are based on seeing things on a multi-year, not day-by-day basis. And if you’ve put all your money in crypto… OK, you may know more than the rest of us, but you must also hate sleeping (and paying for a mortgage, we suspect).
The reality is the appetite for risk a day trader embraces is not the same as that faced by a 25-year-old steadily drip-feeding into a pension. Grown-up investing should have a minimum time horizon of ten years; even better, twenty or thirty. History lesson: in 1987, the overall stock market fell $1.71 trillion in a single day; in 1929, 23% in a single day; in 2008, the FTSE was a car crash.
These sort of events are extremely rare at the index level, but individual stocks, even the Apples and Nvidias and Alphabets, experience falls of that magnitude several times a year.
Like it or not, the stats just do tell us that CAGR and compound interest is the superpower that the long-term investor gets access to—if they hold their nerve. If you zoom out and see this year’s FTSE 100 or the DAX or the S&P 500 over a five-year window, not a five-week one, much of the noise fades.
The reality is that companies and sectors are hot for a minute, then they’re just not anymore. A year ago, Tesla looked invulnerable; then its CEO made some questionable PR moves, no one wants to buy its cars in Europe anymore, and it’s now in some convoluted pivot to becoming an AI data centre in space and the Moon with robots play, or something.
It may well succeed—Elon’s a smart cookie, after all. But fashion and buzz are a terrible way to gauge your future in 30 or 40 years. In fact, short-term volatility matters over months or even a few years, but evens out dramatically over decades: over time, it’s simply part of the economic cycle—and a big, loud Crash every now and again is actually positive, as it allows some assets to be quietly scooped up and added to a portfolio.
What are the real risks then long term?
And don’t fool yourself; governments change. Tax regimes evolve. Central banks raise and cut rates. And over time, productive businesses adapt, innovate, expand into new markets, improve margins and compound earnings—or get acquired and interesting new players emerge to continue the cycle.
So, I just buy a few stocks and I am gold? Well, unfortunately, life isn’t like that. There are risks beyond the sound and fury of a bellicose politician or a little bit of war. And you need to address them effectively. These are the real risks –
Inflation If your portfolio is not growing faster than prices, you are becoming poorer. You need to factor both low and high inflation into your forecast, as they demand different kinds of responses—which, if applied, will lessen your exposure and even get you to a better place mid-term
Concentration risk. Going all in on one or two pet investment darlings can lead to permanent capital loss. Diversification has to be your defining strategy here. In a Thera Wealth Management portfolio, for example, we consciously set out to spread risk and opportunity; you’ll own roughly four thousand companies around the world, so when one sector or geography struggles, another steps up, and so the merry-go-round continues to your benefit. (This year provides a good example; Palantir and Bitcoin are down around 25% so far in 2026, yet the FTSE All-World Index is still slightly positive)
Your behaviour– And finally, those old animal spirits. When markets fall, there is a very human urge to do something; when markets are growing like Topsy, the same instinct kicks in. But this is when mistakes get made. Having someone be the voice of caution here and nudge you to put some into cash reserves, never not owning bonds to smooth the ride, and keeping that wider view and cool head to get through both crises and Christmas can really help.
Right now, a steady hand at the tiller is what you want
Bottom line: markets don’t move in straight lines. They never have!
But for those investing with a ten-, twenty- or even thirty-year horizon, short-term turbulence is just noise. Compounding is frequently described as the eighth wonder of the world. I like to be less grand and say to clients like you it’s just the disciplined reinvestment of returns over extended periods.
But it requires a crucial ingredient: staying invested. Why not see how we can help you see the bigger picture.
- This blog is for information purposes and does not constitute financial advice, which should be based on your individual circumstances.
- Past performance is used as a guide only; it is no guarantee of future performance
- The value of investments may go down as well as up and you may get back less than you invest.
- Any rates of investment growth shown, are intended as a guide only, they are not guaranteed, nor are they intended to be either minimums or maximums.