How to successfully invest long-term?

Yesterday we have spoken about passive investment, which is usually associated with a long-term horizon. In this occasion, we would like to focus on a few tips to ensure success when applying a long-term strategy in stock or currency markets.

Discipline first

If you are a day trader, you also need to follow a strong discipline. But your strategy allows to constantly modify your positioning or adjust to market conditions in a faster (and riskier) way. Once you identified yourself as a long-term investors, you should understand that the idea behind this type of investments is that you shouldn’t touch the money for quite sometime. Of course you can access your funds and make changes, but then you’d be breaking the core concept of long-term investment.

Avoid panic

Open the 5-minute chart on your trading platform. Now open the 30-minute chart. Now move to the 1-year chart. See the difference? All that noise goes away when working with a wider timeframe, which can be pretty useful to identify macro trends and avoid the panic of day-to-day market ups and downs.

Don’t forget to diversify

The idea of not checking on your investment everyday should be supported by a suitable strategy that includes just the right amount of diversification to your portfolio. Why you should diversify? Let’s put it like this: even the best performing companies can go down overtime. And if all your money depends on the value of THAT stock, then you’d be in big troubles.

Keep an eye on global trends

As a long-time investor, you would have enough time to check on other things. Global trends should be part of that things. Try to identify what will become popular in the future and include it on your portfolio. Clean energy is a very good example to start with.

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