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How to Become a Long-term Investor
It’s a fairly predictable pattern: When the stock market rises, more people invest, but after a large-scale drop, many of these same people head for the exits. But by staying out of the financial markets, and only putting their money in “safe” vehicles that offer few or no growth prospects, are they really helping themselves? Here’s the bottom line: If you’re going to make progress toward your long-term goals, you have to become a long-term investor. But how?
To begin with, you need to understand that long-term investing involves accepting inevitable short-term price swings. You may not like seeing those sharp price drops, but it will help your outlook greatly if you can keep them in perspective. Studies have shown that the longer you hold your investments, the less impact market volatility can have on them.
So, to reach that point where the market’s ups and downs have less of a cumulative impact on your holdings, consider the following actions:
Short-term price drops are not pleasant to experience. However, you can help yourself become a better long-term investor by following the above suggestions, so put them to work soon – and stick with them.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.
How to Become a Long-term InvestorShort /Radio version:
PSA: How to Become a Long-term Investor
When you invest, you will experience declines in the financial markets. But the longer you hold your investments, the less impact these drops can have on your portfolio. So take some steps to become a long-term investor.
First, only invest money you won’t need for a long time. This will help you overlook the inevitable down periods in the market.
Also, keep your focus on what matters most to you. For example, if you want to travel extensively when you retire, keep thinking about what that might look like. By doing so, you’ll find it easier to keep working toward your goals.
Finally, don’t spend too much time examining short-term results in your investment statements. Instead, look at some of the report’s longer-term trends, such as the possible increase in the number of investment shares you own. The deeper you dig into your statement, the more motivation you may find to keep on the long-term track.
It will take discipline to invest for the long term – but it’s worth the effort.
This is (FA’s NAME), your Edward Jones financial advisor at (Branch address or phone #).
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