Long-Term Investing Strategies That Work

Alright, let’s talk about eight different strategies for long-term investing that really work, okay? The big key word there is long-term. Okay, these are things that you stick with for the duration of your investing time. Okay, the first one is going to be start early. Yes, get started, but start as early as possible. The magic of compounding is just amazing. Take for an example, you’ve got a person that’s investing. Okay, they start at age 25 and go for the next 10 years until age 35. Let’s say they put away $200 a month with an average rate of return of 7%. By the time they reach retirement age of 65, they’re going to have north of $300K saved for retirement. Just in those 10 years of investing there and stashing money away, okay? Now let’s do the flip side. Let’s say that that person didn’t start at 25, but waited until age 35. Still did $200 a month, but continued that on until reaching age 65 with that 7% rate of return. Guess how much he’d have if he waited that 10 years before investing. He’d only have $245K roughly saved for retirement age 65. So you could see there that’s a huge difference between okay, just investing for 10 years versus starting 10 years later and having to invest until you retire at age 65. That’s a big difference. So it just really pays to start early. Okay, next up would be to diversify far and wide. What does that mean? Well you know, everybody is kind of familiar with stocks, bonds and mutual funds. But what about the different types of investments that are out there? Whether it’s ETFs, annuities, treasuries. I mean there’s so many different investment tools out there. Make sure that you’re investing for the long-term, but very well diversified as well. Don’t just stick with stocks, bonds and mutual funds. Look at all of the different options that are out there. Number three, stay invested. I think Dave Ramsey was the one that said it best when he said, The only people that usually get hurt on a roller-coaster are the ones that jump off, right? And that just applies perfectly to the investing world because you know when the market is going to go up and down. Stay invested, don’t jump off that roller-coaster because you have to time it right, twice, right? Time it right to get out once and then to get back in. And that’s something that’s very, very hard to do. The next one is make sure that you’re sticking to your different asset allocations, okay? You know oftentimes we have clients where they’ve got a certain portion in stocks, a certain portion in bonds, annuities and so forth. You know you don’t want to make those emotional knee jerk decisions to get out of one asset allocation because maybe the other one is doing well and so forth. That again boils down to timing. Trying to time the market and that is so hard to do. Up next, be the Goldilocks or cash. What does that mean, right? It means to have some sort of money set aside, whether it’s in cash or a safe short duration bond mix that you can draw from in times of market turmoil, okay? So this should give you a little bit of piece of mind knowing hey, I have this portion set back in cash that I can use to take money from if the market is in a down position or you know going through that turmoil, right? So it provides that peace of mind. Also, another one. Don’t forget about taxes. Okay, you’ve got that partner in your retirement account, the IRS, Uncle Sam. They want their cut, okay? Make sure that you’re planning for that. Where are tax rates going to be 10, 15, 20 years down the road? These are something you should be paying attention to and meeting with your Financial Advisor or your Accountant on an annual basis to determine what you can do within your retirement planning strategy to minimize taxes and get Uncle Sam out of your pocket as soon as possible. Number seven, keep costs low by using ETF indexing strategies, okay? So this is awesome because you know typically there is no front-end loads or back-end loads when you’re investing in different indexes or ETFs. They also offer you some diversification because within those ETFs you can track different sectors of the market. So not only is it low cost, but it’s also helping with that diversification. And then finally number eight. Make sure that you’re diversifying your income streams as well. So don’t put all of your retirement assets into those retirement accounts or pre-tax accounts. Look at Roth accounts as well and maybe just a normal brokerage account too. Because as you get closer out to retirement, you’re going to want different income streams, right? And you don’t want it all to be taxable. So make sure that you’re taking a look at that as well. Alright, if you have any questions on long-term investing strategies, please don’t hesitate to reach out and don’t forget to follow us on YouTube as well.