5 Tips to Make Profit on Long-Term Investing

by Andrew McGuinness     jul. 16, 2019

In order to make profit from investing in the stock market, your safest bet is long-term investing. Time and patience is the market’s greatest friend. The following is a list of 5 tips in order to make a profit on long-term investing.

1. Avoid innately erratic markets

The markets for oil and gold are so expansive that there is actually no trading limit. If you were to successfully predict one of these markets, this would lead to an unbelievably large profit. The likelihood of anyone predicting this type of market, however, is slim if not impossible. The bottom line that such largely unpredictable markets as oil, gold, and interest rates should be avoided altogether if you are looking for a safe, stable profit.

2. Long shots are not worth their weight in gold

Even though long shots are relatively expensive, the returns you receive from them will be scarce. That is, if you get any returns at all. The longer your money is invested in long shots, the more likely you will lose it over time. In order to make room for any sort of long-term success, it is advised that you remove a majority of, if not all long shots from your investment portfolio. Instead replace these with something guaranteed to be slightly more valuable at the very least, like compound interest.

3. Invest what you would usually spend on nonsense

Many people say that they currently don’t have enough money to invest and will try in the future. The problem is, the future never comes. If you make excuses not to invest today, odds are you will continue to have excuses tomorrow, the day after, and five years from now. If money is the excuse being used, it is almost guaranteed that there are a number of unnecessary items in your budget that could easily be removed and exchanged for an investment in stocks.

We are unaware of just how many monthly investments we make toward products and services that we don’t even need. This includes cable television, Netflix, Amazon Prime, and other memberships. We buy things we can’t afford, putting them on credit cards that take us years to pay off. This is where the money of so many Americans is being invested and wasted, never to be seen again. There may be risk involved in stock market investing, but is there any risk higher than losing your money completely, as exemplified through the constant investments above?

4. Diversify your investments

In order to make a profit or have a nice balance of profit and loss, diversifying your investments is essential. In order to diversify your investments, it is necessary to build a portfolio consisting of several different types of investments. This way, while some might drop and remain low one week, they are likely to become stabilized and balanced off by the variety of other investments you’ve made.

5. Account for money problems

People who invest don’t tend to account for times when money might get tight, like the passing of a family member (funeral expenses), after natural disasters (house repairs), etc. Unfortunately, this could mean you will be forced to gather all of your funds and pull your investments from the market.

There is nothing worse than knowing it is the wrong time to pull an investment, but circumstances forcing you to pull them anyway. For this reason, investments as well as cash reserves should be available when cash starts to run dry. If you are truly desperate, your investments are always available to pull. However, if your cash reserves are enough to settle these financial problems, your investments can remain untouched.

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