The Benefits of Investing Consistently

Sometimes you only need to hear about Black Monday in 1987 or remember the after-effects of the World Trade Centre attacks to decide that investing is too volatile for you. But often it takes perspective more than anything else to be a successful investor.

There have certainly been many times throughout history when the market has temporarily stumbled. But that doesn't mean you shouldn't invest. In fact, regardless of political events, economic conditions and short-term setbacks, the stock market has prospered over the past seven decades.

What's even more interesting is that, very often, the reasons people choose not to invest might actually be reasons to consider investing more. Counterintuitive perhaps, but as the chart below shows, some of the best opportunities have arisen when things appeared to be at their worst.

How £10,000 Grew (income reinvested net of basic rate of personal tax)

Date	Event	5 yrs. Later*	10 yrs. Later	20 yrs. Later*
1975	Unemployment hits 1.1million	£22,600	£62,500	£111,500
1976	Interest rates hit 15%	£25,200	£78,600	£132,900
1980	Iraq invades Iran	£27,700	£49,400	£100,800
1984	Miners strike	£23,700	£35,400	£85,900
1987	Black Monday - Market falls 25%	£18,700	£38,000	£34,000
1992	UK leaves the ERM	£20,400	£18,200	£24,719
1995	Barings collapse	£18,700	£17,382*	----------
1997	Hong Kong handover	£8,900	£12,077*	---------
2001	September 11 terrorist attacks	£10,497*	---------	---------

Source: 2004 CSFB Equity Guilt Study/Bloomberg
*Through 31/12/04
All figures are calculated based on the year end date for the year in which the event occurred. This example is for illustration only and not indicative of any investment. Assumes reinvestment of income net of basic rate of personal tax. Past performance is not indicative of future results.

Even if you can afford to invest only a small amount, it can make a big difference over time. For example, imagine that you put aside £5 for each of your three daily meals, for 365 days a year. In 20 years, you could have saved £109,500. That's taking advantage of time and it's a strategy that we believe in at Edward Jones.

A Balanced Approach
Rarely does someone get rich sitting on the sidelines. You have to get in the game to achieve your long-term goals. Edward Jones can help you ignore the pessimism that surrounds short-term disappointments and develop a strategy that helps you achieve your financial goals.

Invest in Quality
We believe in recommending quality investments that have stood the test of time. Although it may not be as exciting as the latest trend everyone is talking about, our research shows that they're usually less likely to disappoint our clients.
Diversify, Diversify, Diversify
Since we have yet to meet anyone who can predict the future, we believe it's important to diversify across a range of industries in a variety of investment types from growth (growth shares and mutual funds) to income (CDs, bonds and income mutual funds). Owning different types of investments can help to reduce risk and potentially increase returns within your investment portfolio.
Think Long Term
We believe that what matters is time in the market, not timing the market. In other words, we recommend that instead of jumping in and out of investments to try for huge gains, it's more important simply to be in - and stay in - the market for the long haul.

While no one can predict what will happen, we feel we don't need to see the future to help you invest wisely today. Edward Jones believes in helping you build a diversified portfolio of quality investments. We advise our clients to invest for the long-term, instead of gambling with get-rich-quick schemes. By sticking to principles like these, we believe it's easier to overcome the ups and downs of the market.

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