BACK TO KEEP CALM AND REMAIN DIVERSIFIED

The Importance of a Long-Term Perspective


Market highs and lows have historically evened out over the long term, particularly if you were invested in a diversified portfolio. Adhering to a lengthy time horizon may not always be easy, especially in a downturn, but it can be a valuable discipline. As this chart illustrates, short-term volatility can be violent. Knee-jerk reactions to market fluctuations can lead to buying high and selling low, making it difficult to stay on track and achieve long-term financial goals.

20-year
Annual Avg.
Total Return
Growth of
$1 Mil over
20 Years
green S&P 500® 6.06% $3,242,093
black Diversified Portfolio 6.61 $3,596,734

Source: FactSet. As of December 31, 2019. Performance represents a rolling 1-, 3-, 5-, 10-, and 20-year window with a 1-year moving step. Start date for analysis is January 1, 1996. The indices are unmanaged, are not available for investment, and do not incur expenses. Click here for index definitions.
Past performance is no guarantee of future results.

Diversified Portfolio

The indices are unmanaged, are not available for investment, and do not incur expenses. Click here for representative indices and definitions


Investments in debt securities are subject to credit and interest rate risk. An increase in interest rates typically causes the value of bonds and other fixed income securities to fall.
Investments in international securities are subject to certain risks of overseas investing including currency fluctuations and changes in political and economic conditions, which could result in significant market fluctuations. These risks are magnified in emerging markets.
Investments in small-capitalization companies are subject to greater price volatility, lower trading volume and less liquidity than investing in larger, more established companies.
Real estate investments are subject to factors such as changing general and local economic, financial, competitive and environmental conditions.
Alternative investments are speculative, subject to high return volatility and involve a high degree of risk including, but not limited to, the risks associated with leverage, derivative instruments such as options and futures, distressed securities, may be illiquid on a long term basis and short sales. There can be no assurance that these types of strategies will achieve their objectives or avoid substantial losses. Alternative investments may also be subject to significant fees and expenses.
Investments in emerging markets are subject to risks such as erratic earnings patterns, economic and political instability, changing exchange controls, limitations on repatriation of foreign capital and changes in local governmental attitudes toward private investment, possibly leading to nationalization or confiscation of investor assets.

AMG Distributors, Inc., a member of FINRA/SIPC.

Keep Calm & Stay Connected

Download the Brochure

Our complete guide for investment success

Share This Page

Contact Us

800.369.4410
clientservice@amg.com


Get Our Latest Posts Delivered Right To Your Inbox.

More Like This

The Power of Diversification

A diversified portfolio has the potential to smooth the ride while reducing losses.

Read More

A Diversified Portfolio Offers Better Performance and a Smoother Ride

Most long term investors agree that the balanced approach of a diversified portfolio is a sound strategy. Are you properly diversified?

Read More

Three Decades of Market Cycles

Although most investors don't think in terms of standard deviation, it's an important tool for measuring risk. Especially when reviewing the last three decades.

Read More
  Back To Top