One of the defining features of our investment approach is our long-term view. We make investment decisions and set our investment strategy on a 3-5 year view but, often, we invest in companies for much longer than that.
Turnover in the CF Woodford Equity Income Fund in the year to 30 June 2015, for example, was 16.0% 1 which implies an average holding period of over six years.
The chart below is a great illustration of why it is important to think long-term about equity investing. Essentially, this chart is showing the historic probability of gain from the UK stock market 2 over different time periods, using data stretching back to 1965. If you had invested for 1 day, the data suggests you had a 55.2% probability of making a positive return. In effect, you might as well have been tossing a coin!