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Long-term investments are investments made for future purposes within the next 5 years or longer. Many people say that stocks are the right investment tool for the long term.
This is true Looking at the composite stock index (JCI), it’s likely to appreciate within five years or more. In 2017-2022 alone, this stock index could rise by more than 17%, not to mention if You look at the development of JCI values over a long period of time.
However, to be successful in long-term investment There are a few important things that you should pay attention to and consider. Here are 7 important ones:
1. Set goals and discipline.
The first tip is to set goals, timing, and investment goals. These three things will help you in a number of ways. From determining the right investment tools Monthly investment amount determination to helping you stay disciplined
It is undeniable that there will be many investment temptations over the next 5 years or more of the investment period. For example, let’s say you are investing in wedding expenses over the next 5 years. In the past, there must be a need or desire that motivates you to invest.
As long as it’s not urgent, such as medical expenses or other emergency needs, try not to invest money into the wedding. Because your return on investment will be the highest if you don’t do it for the next 5 years.
2. Choose stocks with the best strategy
You should choose the best stocks because your desired profit direction is long-term profit. The best stocks are the ones you choose using the best technical and fundamental indicators. The best stocks are not the ones recommended by some. Let alone influential people.
when you get recommend long-term stocks From influencers or other sources (including this site), make sure you analyze the stock’s technical and fundamental conditions before buying. Because there are times when one’s preferences and analytics results. one is different from the others So what is good for others may not always be good for you.
3. Ignore price fluctuations
Another thing that interferes with your discipline in long-term investing is price volatility. Remember that when compared to other instruments such as bonds and mutual funds, Stocks are short-term volatile and risky instruments. Therefore, this tool is only suitable for short-term investments for investors or traders who are experts in their field.
Additionally, the focus of your investment is on long-term profits and not on short-term profits or avoiding short-term losses, so you can ignore short-term price fluctuations.
You can consider these price fluctuations if:
- Stock prices in consecutive weeks touched. Auto reject below (ARB) defined by IDX or;
- Many stock prices are still touching. reduce the loss level that you set
This is important because stocks still tend to have a long downtrend. No matter how hard you do the analysis.
4. Diversify risks
The fourth trick is to buy multiple shares at once for a single purpose. For example, for wedding expenses over the next 5 years, you buy shares in Company A, Company B, and Company C, of which Company A, B and C is involved in various industries
The goal is when stocks are falling in price. Your portfolio will not lose much. Because there are still profits from other stocks. Where prices do not go down or even increase at the same time, side effects, you don’t have to worry if your portfolio is in the red.
When choosing this stock combination you can choose Value stocks or growth stocks or a combination of both Value stocks are good stocks that are discounting (discounting), while growth stocks are stocks that you expect to increase in price in the future.
5. Set aside without exception
In addition to the technical aspects of stocks and capital markets, One of the keys to successful long-term stock investing is from a financial management standpoint. You can say that your return on investment won’t be the highest if you can’t allocate your monthly money and it depends solely on the remaining money.
This is because later the amount you invest will not be fixed let alone increase. There must be many monthly needs or wishes that seem to be fulfilled and cannot be postponed, so make sure that your daily needs and emergency fund allocations for yourself and your family are answered. Responsive when allocating money for long-term stock investments
Therefore, the amount of investment you submit will be consistent or more for maximum results. As such, it is not surprising that some say that individuals who are able to invest consistently tend to have quite good money management skills.
6. Periodic evaluation of investment returns
One factor that makes investors feel afraid to miss (Fomo) This is the time when he often checks his online trading application unscheduled. Whether it’s for fun or he really wants to know.
You may not be able to be . sleepy investors, But a sudden scrutiny of trading applications can cause you to suffer FOMO and ultimately make illogical decisions.
to solve the problem You can evaluate your investments and strategies on a timely basis, either once a week or once a month. You will continue to act rationally and your investing activities will not interfere with your daily schedule.
7. Keep learning
The movement of stock prices in the market is not fully predictable. The purpose of technical and fundamental analysis is to help limit the possibility of such predictions being wrong. It also means that there will be many factors besides the technical and fundamentals that you will learn when investing in long-term stocks.
This new beginning is based on the latest fundamental and technical analysis. to the latest news about these investment tools. by learning new things continuously You will be able to avoid harmful things and still be able to benefit.
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