It is time in the markets, not timing the markets that works long-term.
Investing for the long-term allows you to ride the waves of the investment market. The S&P/TSX Composite Index, for example, has had a compound annual return of approximately 7.8% over the past 25 years. These returns account for the most recent financial crisis and the dot-com bubble. Previous market declines have offered buying opportunities for clients who have funds to invest.
Here are 4 strategies to consider while investing long-term.
1. Start Early
You can’t go back in time (as far as we know), so the earliest you can start investing for the future is NOW. This is the single most important piece of advice we can give you.
2. Make Investment Goals
When do you want to retire? Do you want to pay for your child’s education? What is your dream home?
All of these are great questions to ask yourself while setting your long-term investment goals. By understanding when you need the money you’re investing, you will have a better idea of appropriate investments to choose and how much risk you should take.
3. Diversify
If you have looked into investing at all, or heard people chatting about it at the water cooler, you are sure to have heard or seen the buzzword “Diversify”.
Spreading your portfolio across a variety of assets allows you to hedge your bets and boost the odds you’re holding a winner at any given time over your long investing timeframe. Ask your Financial Planner how well diversified you currently are.
4. Review Your Strategy
You’ve committed to sticking with your investing strategy, but you still need to check in and to see how things are going. Maybe even make adjustments if needed. When you check up on your portfolio, you want to make sure your allocations are still on target.
Speak with your Financial Planner to find out the best time to checkup on your strategy.
If you have questions about anything in this article, please feel free to contact us.
