one. Putting money into stocks with deep conviction
As a long-term investor, your job (or at least your best path to wealth) isn’t to figure out where the bottom is. Instead, it’s about separating the companies that have a bright long-term future, where today’s price will hardly matter, from the companies that saw their share price drop because they don’t have strong business fundamentals.
Long-term investors view falling markets as an opportunity to add to their portfolios. Before you can even think about doing that, you need to think about what it means to be a long-term investor.
A long-term investor buys shares in companies that they intend to hold for years, basically forever. Typically, a long-term investor has an investment thesis, a reason why he wants to own the stock. That thesis should give the long-term investor faith in that stock, even as the company’s share price falls.
two. Inform
A long-term investor checks his holdings to make sure the company hasn’t made a change that would cause him to deviate from that thesis. For example, did the CEO change and did the new leader make a major change in the way the company operates? Or, something big happened in the market that changed the way you view the company’s prospects.
3. Getting rich in a bear market is it possible?
Down markets, bear markets, and stock market crashes put good companies up for sale. If you have a company you believe in (and maybe you already do), you can buy stock knowing you’re making the right decision for your future, even if the bear market continues and stocks drop.
Long-term means years, sometimes decades, and a stock price decline due to market conditions or macroeconomic conditions allows you to buy stocks and do what is known as dollar cost averaging. That’s where, instead of waiting for the best price, you buy shares as funds allow, averaging the price you’ve paid to own shares in the company.
Four. time is the key
The challenge, and it’s a big one, is that long-term investing means holding stocks for a long (or long) time. Right now, that may mean your portfolio has taken a big hit, but if you believe in the company you own for the long haul, then it makes sense to hold them and add to those positions.
“If you’re not willing to own a stock for 10 years, don’t even think about owning it for 10 minutes. Our favorite holding period is forever,” said Warren Buffet.
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
