It’s time to review what’s important when it comes to long term investing. The current COVID-19 pandemic has created a perfect environment for unusual and unexpected market conditions. Ignore the noise and stay the course.
Whether it’s retirement planning or paying off your mortgage many years away, stay the course with your long term strategy and keep your eye on your goal are crucial to your financial success.
Day trading is not a good idea. Don’t jump on the bandwagon of opportunists and risk takers. These are not recommended strategies for long term investing.
Your goal is to manage your long term investment plan properly. Going forward, you do not want to take on unnecessary or unanticipated risks with your investments.
- Don’t put all your eggs in one’s basket
Diversify the types of investments based on your risk tolerance level and investment profile. The 3 main groupings are cash, fixed income and equity. Your investments ideally should spread over all these groupings.
- Periodically re-balance your portfolio
Review your investments and align the 3 main groupings back to your investment plan’s proportions. Keep in mind the economic outlook going forward. Sell some investments to realize some gains or losses, buy others. You want your portfolio to stay the course in the long term. Your investment advisor can assist you with the best way to appropriately plan for the taxation aspect of your investing strategy.
- Invest small amounts regularly
This will average out your investment cost and keep price fluctuations in check. You’ll be pleasantly surprised how your nest egg can accumulate over the long term, especially with the magic of growth compounding.
- Put money in investments you understand
Do not gamble on investments that sound complex and murky, or based on a hot tip. Usually you’re being sold on the promise of a high return. But in most cases, they come with high risk of you losing most or all of your money.
- Keep up your knowledge and understanding on investing
Join a reputable investment club, engage the help of a good investment advisor and read up on investment related articles. These are all good ideas to keep yourself up to date and well informed on investment matters.