Successful Long-Term Investing

by Charlotte Wood
(last updated February 21, 2009)

Investing is one of those money games incorporating both skill and chance. You can strategize and scheme and buy and sell all you want, but sometimes fate has an unfortunate habit of stepping in and undoing everything you've worked hard to build. This risky game of uncertainty holds a certain appeal for some and for many it's a fun game that you can either base your entire net worth and more on or you can just dabble; either way investing is a gamble game and one, if you're interested in long term options, you need to understand and know a few invaluable tips.

First and foremost you need to acquaint yourself with the market and the economy. Familiarize yourself with the stock market and seek the opinions and advice of successful investors. Investing can be a top way to make your money if you play your cards right. Once you know the market and the trends, being able to spot patterns and interpret fluctuations in the economy you can start becoming serious about being a long term investor.

Use shrewdness when investing. Don't hold on to stocks just because it looks like a worthy investment on paper. Sometimes you just need to let it go, accept you've made a loss, and move on. Holding on to worthless and stagnant stock is no way to reap a dividend. Conversely, don't discard the smaller investments that show promise. Even if a stock isn't necessarily growing by leaps and bounds, but is still successful, you don't have to sell it in favor of a more "established" stock. Honing this mentality and skill will take time and experience; you'll have to win and lose to find the loopholes and hidden intricacies of the game.

Don't go for the penny stocks just because they're cheap; these are usually less stable and just because it's initially inexpensive doesn't mean it's a good investment. Also don't be the one who always streaks after the latest "hot tip" or more realistically red herring. You can't rely on the tip offs of others; do your own research and make your own judgment calls. It's your money—you should know exactly what you're doing with it.

Along with doing your research and getting to know the market, don't be afraid to invest in a less-known company. Not all of your investments need to be big, widely known companies; some of the best investments come from companies that stay out of the limelight and just do their business. Never underestimate the non-household name.

Once you find an investment tactic that works for you, go with it and try not to stray from it too much. An indecisive investor is not a successful long term investor. Also remember that the majority of your decisions are based on what's happened in the past, but the decisions you make regarding your investments are dependent upon what will happen, the future. Just because a company has done poorly in the past doesn't mean they won't boom later and vice versa.

Successful long-term investing doesn't happen overnight; it takes time and patience and experience. You can be a successful investor but you really just need to learn the tricks of the trade and find your own investment style off which to operate. Here's to high dividends!

Author Bio

Charlotte Wood


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