Are we short-sighted?

During the last 50 years, South African equity returns exceeded the returns of bonds and cash by roughly 6% compounded per annum. This outperformance came with significant volatility; i.e. ups and downs in financial markets. There are periods where shares in listed companies will underperform bonds and cash, as has happened in South Africa during the last 3 years. In the long run however, stocks as well as listed property will outperform all other asset classes. Why then is it so difficult to hold on to these investments given the higher expected returns, especially if most of us have a longer investment horizon of 20, 30 or even 40 years?

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