Long-term Investing Strategies


A Roman playwright once said, “In everything the middle course is best: All things in excess bring trouble to men.” This quote can be applied to many situations in life, but one that you may not think of is long-term investing. Balance and calibration are essential for investing successfully over time. There are many ways you can achieve this balance. Here are just a few tips.

  • Only invest in what you can understand – “Ignorance is never bliss when betting on a particular sector or company over time. Otherwise, you may as well play the slots in Las Vegas,” says Contributor Lou Carlozo in U.S. News & World Report Money.

Balance and calibration are essential for investing successfully over time. There are many ways you can achieve this balance. Here are just a few tips.You’ve got to be informed to make good choices; it’s not just a matter of throwing your money on a prize horse because of its fancy-sounding name. Being able to discern what investment talk is just noise from what is actually meaningful in the decision-making process is but one step.

  • Start early – Those who begin investing early have a prime opportunity. Not only does your money have more of a chance to grow, but you get to observe trends in the market’s ebb and flow. This knowledge is power.
  • Take advantage of a 401(k) – The United States Bureau of Labor Statistics found that 30 percent of workers with a 401(k) offering that includes an employer match do not participate. That means 30 percent of that segment of the workforce turns down free money. Just be sure that you contribute enough to qualify for the employer match.
  • Don’t invest emotionally –Letting partisanship or any sort of loyalty sway your investments one way or the other is one of the biggest mistakes you can make. Separating emotion from your goals will lead to level-headedness, open-mindedness and better, clearer decision-making.
  • Make investment its own animal –Don’t feed two cows with one bucket, so to speak, by relying on money from investments as your cash reserve. You always want to have liquid funds at the ready.
  • Diversify –It’s one of those investment jargon terms that everyone should know, and everyone should know how to apply the concept. Diversifying (or enlarging or varying a range of products) within and among asset classes is the smartest move for an investor.
  • Be patient, not hasty –Don’t be too quick on the gun to dump a poorly performing set of investments.

“In a large number of instances, portfolios need tweaking with time rather than a complete overhaul, which nervous investors too often resort to during down market cycles,” explains Carlozo.

The overarching theme throughout these tips, however, is to stick to the plan, no matter which one you opt for, says Jesse Mackey, chief investment officer of 4Thought Financial Group, a consulting firm in New York.

“Simply adhering to the cash-flow plan, while making reassessments as life progresses and needs change, will put an investor 90 percent of the way toward achieving his or her goals,” Mackey concludes.

Stop by to speak to the experts at your financial institution so you can develop a plan that works for you.

 

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