Investing with long-term strategies helps guarantee a solid return. Looking at longer horizons, common indices such as the S&P500 and the MSCI World Index have a strong return. In the short term, this is subject to changes (e.g., due to economic crises). If you have the opportunity to invest on longer horizons, you will have a higher probability to have positive returns. This is with minimal risk compared to more risky growth stocks and crypto. In this article, we will look at how you can get started with long-term investing. Next, we introduce how a stock tracker can help you track your progress.
How to start with long-term investing
If you want to commit your money for a longer period, you need to make sure to do your research. You will invest, and continue to invest, in a small bucket of companies or funds. This is the best approach, but also the most difficult one. Which companies and funds do you need to select?
Determine your risk appetite
The investments you select are based on your risk appetite. If you invest in riskier companies, you will likely have a stronger return. For example, growth stocks such as EV companies have a higher chance of an upside than a broad index fund. However, the company could also go bankrupt and leave you with nothing. For safe choices, we recommend looking at broad funds that invest across the globe. Good examples are the MSCI World Index and the Vanguard Total World Stock ETF.
Automate your investment
Once you have decided on the funds and investments, you can set up automated transactions. It is best to invest a fixed amount every month or week, this will help you to limit exposure to market fluctuations. This is also known as Dollar Cost Averaging (DCA). When automating you will feel less emotion. For example, when the markets are high you will feel pressured to skip your investment. However, as has been a lesson from the market through COVID, waiting is not always best.
Tracking it through modern applications
Investment tracking has a long history. Ever since the inception of the ledger, people have been monitoring their investments. This became easier with the introduction of the spreadsheet. Over time, these sheets also became more intelligent. For example, it is now possible to use a function to retrieve real-time market data.
Stock tracker applications
However, the true value no longer lies in the spreadsheet domain. There are many applications out there you can leverage. A good example to explain the functionalities is by looking at leader Delta. They not only offer real-time stock prices but also integrate market news and analysis. Through push notifications, you are updated on the latest information related to your stocks.
This can be a powerful tool for long-term investors, as they can stay up-to-date at major market changes (e.g., to invest additionally) while preventing them from watching on a day-to-day basis. This is better, as you have longer horizons and do not plan to sell in the short term.
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