Attributes of Successful Long-Term Investors
If there is one constant, it’s that things change.
For most people, change creates stress. Few situations create more anxiety than going to bed with everything comfortably positioned, only to wake and find that things are not as you left them the night before. And, with the exception of health-related issues, nowhere does change create more anxiety than with financial issues.
For the past 30 years, U.S. investors have seen wild fluctuations in the values of nearly every asset category they may have owned, whether we’re talking about the free-fall of interest rates from the early 80s (reaching 45-year lows during 2004),the devastating bond market of 1994,the double digit inflation of the late 70s,or the stock market crashes in 1987 and the early 2000s. Suffice it to say, there has always been a reason to sit on the sidelines in order to protect your assets.
The issue then becomes, with money on the sidelines at historically low interest rates, how can an investor outpace the effects of inflation? The way to outpace inflation is to become a successful long-term investor. Successful long-term investors display the following characteristics, regardless of the investments that they choose to own:
1. They tend to own quality investments for long periods of time. They avoid short-term trading. Investing is not a risk-free activity. The markets are cyclical, which is to say that they go up and down. Quality investments tend to survive the turmoil caused by political unrest, high energy prices, corporate scandal or market and interest rate volatility.
2. They tend to stick to a strategy. They are disciplined. Long-term investors develop a strategy based upon their individual needs, goals, ability to tolerate risk, and time horizon. Successful long-term investors adhere to the strategy they have developed and only make fundamental changes as their needs and goals change.
3. They tend to avoid fad investing. They choose the tried-and-true. Long-term investors train themselves to avoid the latest and greatest “hot” investment ideas.
4. They tend to hire professionals to assist in the development, implementation and maintenance of their financial plan. It’s tough for most investors to keep up with all of the changes that occur in their financial life. Having professional guidance in decisions regarding income generation, tax-planning, estate planning, risk analysis and asset allocation helps avoid confusion.
The first step toward becoming a successful long-term investor is to start with a comprehensive planning analysis of your existing financial life to see how your assets are being managed in relation to your long-term goals.
a tailored plan to fit your specific goals
a roadmap for how to spend your time when work is done
to delay or not to delay? That is the question
minimize the stress, and maximize the funds
when scholarships just won’t cut it
planning for the what-ifs
protect your family’s current income, lifestyle, and assets
ensuring tax efficiency