Time is a Key Factor in Investing

Submitted by Edward JonesPrint Story | Email Story

With the arrival of the New Year, many of us will pause and ponder the age-old question: "Who knows where the time goes?" And, as is always the case, none of us really do know. However, wherever the time goes, it will usually be a key factor in your success as an investor.

Time can affect how you invest, and the results of your investing, in different ways:

Growth potential: Contrary to myth, there's no real way to "get rich quick" when investing. To build wealth, you need patience – and time. If you own quality investments with growth potential, and you give them years – in fact, decades – to increase in value, your perseverance may be rewarded. Of course, there are no guarantees, and you'll need the discipline to withstand the inevitable downturns along the way. But in describing how long he likes to keep his investments, renowned investor Warren Buffet says his favorite holding period is "forever."

Targeted goals: To accumulate resources for retirement, you need to save and invest throughout your working life. But along the way, you'll probably also have some shorter-term goals – making a down payment on a home, sending your children to college, taking a round-the-world trip, and so on. Each of these goals has a specific time limit and usually requires a specific amount of money, so you will need to choose the appropriate investments.



Risk tolerance: The element of time also will affect your tolerance for risk. When you have many decades to go until you retire, you can afford to take more risk with your investments because you have time to overcome periods of market volatility. But when you're on the verge of retirement, you may want to lower the risk level in your portfolio. For example, you may want to begin moving away from some of your more aggressive, growth-oriented investments and move toward more income-producing vehicles that offer greater stability of principal. Keep in mind, though, that even during retirement, you'll need your portfolio to provide enough growth opportunity at least to help keep you ahead of inflation.

Thus far, we have looked at ways in which time plays a role in how you invest. But there's also an aspect of time that you may want to keep out of your investment strategies. Specifically, you might not want to try to "time" the market. The biggest problem with market timing is it's just too hard. You essentially have to be right twice, selling at a market top and buying at the bottom. Also, as humans, we appear to be somewhat wired to think that an activity – especially a long-running activity – will simply continue. So, when the market goes up, we seem to expect it to keep rising, and when the market drops, we think it will continue dropping. This can lead to big mistakes, such as selling after a major market drop even though that can be the time when it may be much smarter to buy because prices are low.

As we've seen, the way you interact with time can affect your investment efforts. So, think carefully about how you can put all the days, months and years on your side. Time is the one asset you can't replenish – so use it wisely.

This article was written by Edward Jones for use by your local Edward Jones financial adviser. Courtesy of Rob Adams, 1 Berkshire Square, Suite 114, Adams, MA 01220, 413-743-0552. Edward Jones, its employees and financial advisers cannot provide tax or legal advice. You should consult your attorney or qualified tax adviser regarding your situation. For more information, see EdwardJones.com.


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Williamstown Select Board Awards ARPA Funds to Remedy Hall

By Stephen DravisiBerkshires Staff
WILLIAMSTOWN, Mass. — The Select Board on Monday allocated $20,000 in COVID-19-era relief funds to help a non-profit born of the pandemic era that seeks to provide relief to residents in need.
 
On a unanimous vote, the board voted to grant the American Rescue Plan Act money to support Remedy Hall, a resource center that provides "basic life necessities" and emotional support to "individuals and families experiencing great hardship."
 
The board of the non-profit approached the Select Board with a request for $12,000 in ARPA Funds to help cover some of the relief agency's startup costs, including the purchase of a vehicle to pick up donations and deliver items to clients, storage rental space and insurance.
 
The board estimates that the cost of operating Remedy Hall in its second year — including some one-time expenses — at just north of $31,500. But as board members explained on Monday night, some sources of funding are not available to Remedy Hall now but will be in the future.
 
"With the [Williamstown] Community Chest, you have to be in existence four or five years before you can qualify for funding," Carolyn Greene told the Select Board. "The same goes for state agencies that would typically be the ones to fund social service agencies.
 
"ARPA made sense because [Remedy Hall] is very much post-COVID in terms of the needs of the town becoming more evident."
 
In a seven-page letter to the town requesting the funds, the Remedy Hall board wrote that, "need is ubiquitous and we are unveiling that truth daily."
 
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