However, it is not long term investing itself that is the issue; it is the type of investments that people often get into without realizing the risks and the long term nature of actually seeing a profit.
Long term investing can include the stock market, real estate, commercial investments and other opportunities. Taking a balanced approach, especially if you start young and build your portfolio, is the best way to plan for our future and protect against those valleys in the investment world that can and do happen.
Tips for long term investment include:
• Don’t be trendy – trends or hot tips for investment are rarely what they are hyped up to be and often include very risky investments. Financial advisors don’t act on these tips and you shouldn’t either. If a company, stock or opportunity can’t stand up to scrutiny it isn’t a hot investment at any rate of return.
• Have a strategy – another common problem with people that don’t work with a financial advisor is that they invest in different options willy-nilly without any structured plan. This leaves weakness or gaps in your investment strategy that can compromise or reduce the effectiveness and earnings of your sound investments.
• Long term means long term – some people are obsessed with checking money markets, stocks and investments on a daily basis. If you have a long term strategy and have researched your investment options then this is simply counterproductive. Holding investments that are sound investments allows you to see those valleys and know that the mountain is coming on the other side.
• Maximize tax opportunities – while you should never make a long term investment for a short term tax break, maximizing your tax benefits from investments is a good idea. Here is where a great financial advisor can really make a difference.
Read as much as you can from people that you know have experience in making their money make money. The more educated you become the better informed you will be in any type of long term investment plan.