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www.insideHALTON.com | OAKVILLE BEAVER | Thursday, April 3, 2014 | 26 T Avoid making short-term decisions with long-term investments dif culty is magni ed by the importance investing has on people's lives. Your reasons for investing are to achieve the goals that are most important to you. Matters such as saving and investing to buy a house, educating your children and retiring in comfort are the foundation of people's lives. The culprit is not the arithmetic of calculating investment returns; that is fairly basic and arithmetic is an exact science. The issue is investing itself, due to the magnitude of normal stock market volatility. Depending on the period being measured, the investment results can vary signi cantly by just slightly changing the time period being measured. Investment decisions are often based on performance results and the absence of sound reliable data makes it hard for investors to use the data correctly. As an example, we will consider the investment results over a ve-year period using the Standard & Poor (S&P) 500 stock index in the U.S. Consider the 500 stocks included in that index as a proxy to gauge your own success if you had invested in the U.S. At the end of 2012, your annualized veyear return was 1.7 per cent. Using that information you might nally decide that investing in stocks was a waste of time and money. Instead you move your money into interest-paying investments that pay a two or three per cent return but without the risk of stocks. Then just one year later these same veyear numbers tell a completely different story. Suddenly, the stock market has become pro table and it is where you should be investing. he measurement of investments is often a bit of a moving target. One of the more dif cult aspects of investing is measuring your success. Many people nd investing confusing. For example, combine the challenge of measurement with the fundamental characteristics of rising and falling stock market values. This Dollars & Sense Peter Watson Guest Contributor On Now at The Brick! For more details go instore or online @thebrick.com. For the ve years ending in 2013, the annualized S&P 500 index produced an annualized return of 17.9 per cent. Almost the same period, but remarkably different results. The reason for the signi cant change in performance is simple. The year 2008, which was horrible, was replaced with the year 2013, which was very strong. In 2008, the S&P 500 index lost approximately 35 per cent. In 2013, it gained about 32 per cent. Two lessons can be learned about how the stock market works. First, market gains and losses tend to be concentrated. If you are in or out of the stock market for short periods then your returns over time can be signi cantly different from the returns of the market in which you invest. If you make the decision to invest a certain amount of your money in stocks then see Look on p.27 ThistleCreek Health Care Ltd. Loving Care & Compassion in the comfort of your home! A Helping Hand when you need it. International Centre, Hall 6 Mississauga FREE PARKING Don't miss Canada's celebration of everything English, Irish, Scottish & Welsh! Plus: Great entertainment, shop for specialty products, baked goods, live dart tournament, authentic pub, and more! Adults $15, Senior (65+), $12 Students (12-18) $12, Kids (11 + under) FREE British Isles Show Hours: Friday 10am-5pm · Saturday 10am-6pm · Sunday 10am-5pm April 11 - 13 Admission ThistleCreek Professionals include: Personal Assistants Personal Support Workers Companions Registered Nurses Special Appearance by "DEV ALAHAN" Beatles 50th Anniversary TRIBUTE CONCERT We also offer 1 hour services! www.thistlecreekhealthcare.ca At the show all weekend + BeatlesTribute concert appearance. Limited number of wristbands available online & at the door. FRIDAY APRIL 11 Performed byThe Caverners. Concert doors open at 7pm. Concert tickets are $50, limited seats available. 905-582-9519 For more information call: 905-842-6591 x 245 Tickets now available on our website britishislesshowcanada.com BritishIslesShow BritishShowCAN PRODUCED BY: