Sticking with a long-term investment philosophy is one of those things that’s much easier said than done. Even the very best fund managers can experience losses for 50% of their clients, often because those clients pull money from the fund manager at the worst-possible time.
Almost any investment approach will experience periods of losses otherwise known as “drawdowns.”
If you believe in the long-term validity of the methods used to govern your long-term investments, then the worst thing you can do is sell into a drawdown or withdraw money from a fund manager while they are in drawdown mode.
This is especially true for fund managers who have a 15-year record of strong compound annual growth rates. Over time, those types of fund managers will invariably pull themselves out of drawdown.
The same is true for index investing: Over time, all the major indexes make higher highs.
It’s true that, in many cases, several years can go by before the index in question fully recovers. But if you are investing with a long enough time horizon, then it really doesn’t matter.