Investing for the long term is obviously very important. Importantly, you want to make sure you get your goals down and also create your time horizon.
The first thing to do, depending on your particular situation, is to break down what type of goals you have – whether it’s to save for a down payment for a home or saving for retirement – you want to set very specific goals and monetary targets that you would like to reach.
Save Systematically
The next step is to create a savings plan for yourself. Like most people who earn a salary, you’ll want to make sure you’re putting away a percentage of each paycheck. It’s important that you approach it in such a way that is systematic so that it’s not placed on you to remember to put away 10 percent of your paycheck every month. Instead, it’s done automatically so you don’t spend it the moment you get it. If you set it up with your investment advisor or bank to where the amount is deducted automatically, then it is out of sight, out of mind and will build up over time.
Once you have your goals and your monetary objectives, do whatever you feel is comfortable and is easy to maintain for the long term. As you progress in your investing career and get better at it, then you can increase the amount that you’re saving every week.
Invest in Something You Know
This is always something that I encourage new investors and even veteran and well-experienced investors to do and that is – invest in things that you understand. This completely depends on your own personal expertise and experience. Some people are very well-versed in complicated things like mining and technology. That’s great if you’re an engineer or you work in the field, then 100 percent, I encourage you to invest in something you understand. But, others may want to invest in things that are used on a daily basis. Whether it’s a grocery store or a retailer that you use or even a utility, you always want to focus on investments that aren’t going to surprise you.
Get a Coach
At every level, it is important to have help. Get a coach. Get an investment advisor or financial planner, someone who will grow with you. It’s also important to note that you can hire and fire coaches as you progress. Whether you’re learning on your own or you’re watching TV, listening to pundants and reading books, your education level will increase over time and so will your experience with your advisor. So, over time, you’ll probably want to hire a new advisor or fire an old one, and that’s totally okay!
Also, I think it’s important to have help regardless of what experience level you are at.
Think about it in terms of sports. You’re an amateur player on the golf course or in the hockey rink. If you think you’ve reached the maximum or you’re the best at your particular sport, you’re probably not. At the professional level you’ll see that they have multiple coaches. Take a guy like Dustin Johnson who just won The Masters. He has a putting coach, a swing coach, a fitness coach, and he’s the number one player in the world. As you get better, you actually want to hire more advisors.
Take that same concept and hire the best coach that you can for the money you have. Always look to learn and improve your education.
Lastly, and most importantly, when it comes to trading in the long term, don’t over trade. Instead, be patient. It’s okay to go slow and steady. That’s what you want – consistency. You’re not looking for the big wins all the time.