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Why Long Term Investing Wins Out

March 02, 2020
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Have you heard the hype? Day trading, cryptocurrency, and ultra-high dividend stocks are the latest and greatest way to get rich quick! With an unprecedented amount of buzzsurrounding new investment “strategies” and techniques, investors are at an all-time high risk of losing sight of the most fundamental investment strategy: long term investing.Although the term does not sound as sexy or sleek as terminology like tech startup investing, we’re here to explain why this tried and true strategy wins the day.

Compound Interest

Depending on how much time you have to allow your investments to accrue, compound interest is a powerful tool that can play in your favor. If you are constantly moving your money around while trying to guess when the next recession will hit, which stock will soar today, or what the next big IPO will be, you are surely mistaken. By allowing your money to sit in a reputable and dependable portfolio over the long term, you can maximize the benefits of compound interest.

Emotional Intelligence

Have you accepted the fact that your investments will fluctuate over time? Traders and investment “gurus” often spend days, months, and even years trying to profit from small fluctuations in the market. Unfortunately, they are simply playing a guessing game fueled by emotion. When you take a back seat and allow your professional advisor to take the wheel, or simply stop checking your portfolio every few hours, you take emotion out of the equation: a critical step to maximizing your ROI.

Taxes and Fees

Each subsequent purchase and sale of a stock comes at a cost. Whether you are rendering yourself ineligible for long term tax benefits or accumulating costly trading fees, the truth is that frequent “buys” and “sells” are generally not in your best interest. By putting in the leg work up front to determine a sound investment strategy (or researching to find the best possible advisor), you can avoid having to pay these high expenses over and over again, freeing up capital to contribute to your funds. 

Closing Thoughts

While there are different opportunities available to large investment accounts, the general thought process behind investing is similar. In closing, no matter where you are with your current financial position, we hope you gained valuable insight from our article! 

Here at Castle Financial, we understand that you ultimately decide what makes you happy. Whether spending money now gives you the most enjoyment, or taking console in the safety net of zeroes in your bank account, only you can decide what brings you happiness.

If you are an individual who may need help with financial planning and investment management, Castle Financial is here for you with a complimentary consultation. We have assisted hundreds of clients like you in establishing financial freedom and saving for the long-run. Check us out on our website to get in touch – www.castlefinancial.com