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  Crisis vs Long Term Investment    
     
 
Under a volatile market, the validity of long term investment is always being challenged. We have no way to precisely estimate the date of turnaround, since crisis and opportunity are never certain. However, we may secure some enlightenments from some historical examples below.
 
Linked exchange rate system in Oct 1983 Equity market crash in 1987 4th June event in 1989 Mexico currency crisis in 1994 Asian Crisis in 1997 Tech bubble burst in 2001 911 event SARS in 2003 China austerity policy in 2004 Bankruptcy of Lehman Brothers and AIG Crisis
Hang Seng Index performance from 1982 to 2008
(Note: View the particular events of the financial market by pointing to the numbers on the chart)
 
The above chart shows the performance of Hang Sang index in the last 25 years. History tells us the market has a self-adjustment mechanism helping itself to resume the upside trend. Although the market generally took longer time to return to its previous high*, we can see it usually bottomed out within a relatively short period.
 
* 2001 Technology Bubble, 2001 "911" Terrorist Attack, US Accounting Scandal and 2003 Hong Kong SARS Disease, etc.
 
Source: Reuters, BMI Funds Management Limited
 
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Disclaimer: The information of this website is just for information only; it should not be constituted as recommendation and investment advice. Index is not a financial product, and does not represent performance of any equity portfolio. For those investors decide to invest, they should evaluate their objective and risk level, this information could not be an investment resort.