Overview
As the profit cycle matures, we are increasingly being asked how long-term investors should best position themselves should the economic backdrop and equity markets become more challenging.
Key points
- Markets mark-to-market in the short term and are inefficient in the long run.
- The impact from the compounding of cash flows outweighs the potential impact from valuations.
- Consistent and stable cashflow growth is an important cushion to protect and preserve value through a downturn.