Personal Development, Business, Finance, and Investing for Everyone
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We often hear this, but the question is, how long is 'long-term' in investing? Everyone's answer is different, and in fact, there are a few things to consider in terms of this investing strategy.
In investing, there are lots of strategies that everyone may follow, and one of the most common is the long-term. The phrase "long-term" describes the prolonged duration of an investment's holding. An investment made for the long-term may be retained for five years, thirty years, or longer, depending on the type of securities and assets, such as stocks, crypto, bonds, money market, reit, eft, real estate, etc. While there is no absolute standard, long-term investing for people is often considered to involve keeping investments for at least five to ten years. To answer the question, how long is 'Long-Term'? Here are some questions that you need to consider when investing, especially in the long-term: What are your financial goals? What are your reasons for wanting to invest? You must first decide what your financial goals are. What do you want to accomplish, and in what period? What's your risk tolerance—the amount of risk that you're comfortable with? Without a clear understanding of your desires, your needs, and your potential concerns, what to invest in is not clear. How long do you plan to invest? When will you need the income or your money invested? This is very important because, for instance, if you decide to invest in the stock market for, let's say, 7 years as a down payment for your dream house, what if, during that period, the stock market is in a bear market and your investment is negative? What should you do now? Will you panic and sell all of your investments? Investing in equities for a year is not long enough. Why should long-term equity investing be the only option? Naturally, managing volatility is the answer. Over five or six years, the returns are often substantial, although there is a noticeable variation. Losses or poor performance are possible at any point. Remember, the investment horizon is very important. The length of an investment horizon will determine what types of investment products are most suitable for the investor's goals. The Bottom Line You must know the reasons why you are investing in the long-term. This is to manage and avoid losses in your investment in the future.
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