There are a number of opportunities you can take advantage of when growing your money through investing, guided by a number of strategies as well that you can mix up to achieve whatever goals you might have. If you’re interested then in making long-term investments, there are strategies particularly suited for that goal. To help steer you in the right direction, it would be best if you took stock of strategies that have been proven effective towards making the most out of long-term investments and avoiding strategies that put your money in high risk. Alongside common sense, here are a few strategies to help you ensure success with long-term investments:
- Selling losers and riding winners. Investors generally make profits by selling appreciated investments. However, they are not able to make as much money as they should because they are being weighed down by stocks that have depreciated in value. Many hold on to depreciated stocks because they are holding on to the idea of a rebound. There is no guarantee that depreciated stocks will bounce back that’s why this becomes problematic for a lot of investors. Selling a loser is like admitting a mistake so it’s not easy. But do it as soon as possible so you can cut your losses and move on.
- Not chasing hot tips. In investing, there will be an abundance of “hot tips”, each one bringing with them the promise of major profits. And who doesn’t like to make profits, right? But while you do gamble in a sense when you make an investment, you cannot spend your money just because someone said so. Rather, if you want to make your money to make it far, you should only make investments that you know why you are making. No, because your mother said so is not a valid reason, even if your mother is a broker. What you hear as tips are not hard and fast and do not come with guarantees. If you are interested in investing in anything, do your research first. You can use tips to give you ideas as to what options are available to you but don’t use them believing they will pan out.
- Resisting penny stocks. It’s a common misconception that you have less to lose when you buy low-priced stock. The truth is, whether you bought stocks for $5 or $100, when both plunge to $0 you will have lost all of what you spent as initial investment. Penny stocks carry just as much downside risk as higher-priced stocks, if not higher, since the latter is associated with institutions that enforce better regulations. In simpler terms, you’ll enjoy so much more security if you buy higher-priced stock, though you will have to shell out more in terms of initial investment.
- Picking a strategy and sticking with it. Long-term investments need direction that’s why you have to pick a strategy and then stick with it. You have to do this because you need to give strategies time to work to give you results. Do not change strategies all the time! However, should a strategy fail to give you the results you’re looking for after a considerable amount of time, be open as well to changing courses. There is no such thing as “one size fits all” when it comes to investment strategies, after all.
- Forgetting about tax. Tax implications are considerations you should not dismiss but they should not be your top priority. Your primary goals are to secure and grow your money. Keep that in mind. Matters involving tax that should warrant your concern should generally be limited to minimizing the tax you have to pay as much as possible while maximizing after-tax returns.