If you just came into a sum of money, how would you invest it? One of the hardest parts of investing is the knowledge that you could easily lose the money and end up with nothing to show for it except some market-induced anxiety.
The long-term investment game is not a simple thing. The markets are historically notoriously unpredictable and so depositing money into this investment or that one requires shrewdness and usually a little bit of luck. There are things that you can do as an investor that can help to ensure that the vision you have for your portfolio comes to fruition.
1. Figure Out Your Finances
The first thing that you’ve got to do when considering long-term investments is to evaluate your own resources. Peter Comisar knows that his Story3 firm benefits from having a sound understanding of its assets and available resources. When you know what your financial options, and limits, are, you have more knowledge to apply to the issue, and increased knowledge always makes for better decision making.
When you examine your resources, you might recognize the need to set up a debt management plan. A certified financial planner is a professional who examines portfolios to determine investment possibilities. You don’t want to find yourself in a situation where you have to withdraw funds early from long-term investments.
2. Establish Financial Goals & Timelines
You don’t want to jump willy-nilly into this type of investing without a solid understanding of what you want and when you want it. Though this sounds a bit oversimplified, it is important when considering asset allocations. One method of working with investment over time scenarios is to break up your investments into increments of time. You’re thinking short-term, medium, and long-term investments and there will be differences on the sorts of stocks and bonds that you choose, depending on which increment you’re dealing with. Typically, the shortest timeline will involve the most conservative investing.
When you feel as though you’ve planned reasonably well and lined all your ducks in a row, you’ll be better able to withstand downturns in the market. While nobody wants to see their financial investments disappear, pulling out because of uncertainty will hurt as you absorb losses. Rather, stick to your plan.
3. Diversify Your Portfolio
Diversification is important. Among stocks to consider for your portfolio are large, mid, and small-company stocks, value stocks, and growth stocks. Exchange-traded funds and mutual funds are equally important for boosting diversification.
When considering a long-term investment, remember to get your own house in order first, and then do your homework.