Equity markets are still for long-term investors

Feb 23, 2014 @ 12:01 am

I have been in the business long enough to remember that it is my job as a financial adviser to remind people that the equity markets aren't for them if they don't have a minimum of a three-year time horizon, or more appropriately, a five-year time horizon.

The only thing that the On Retirement column “Buffett's hedge fund strategy leaves much to be desired” (InvestmentNews, Feb. 17) did prove is that investors might want to consider alternatives if their horizon is short and they don't mind higher fees to try to deal with this.

The big firms behind the alternatives stampede are no different from annuity companies, pushing ever-changing benefits and guarantees to “protect” the average investor from market volatility. The cheapest form of protection — one not endorsed by the big firms — is time.

Name one correction that lasted.

Investors should put in the equity market only money that they can leave there for five years or more, and Warren E. Buffett's bet is one we should all take. The column didn't convince me that the plethora of high-cost strategies using the term “alternative” are worth the high fees.

Michael A. Poland

Financial adviser

and portfolio manager

Braeburn Wealth Management

Norton Shores, Mich.

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