Sometimes, the best thing you can do with your investments is… nothing. Like most successful game plans, long term investing demands patience.
One of the most successful approaches you can take to investing is to place your money into investments that have good growth prospects, and leave them alone for a decent period of time.
What’s the long term? For Moneycube, long term investing means at least 2 years, ideally more than 5, and maybe even 20 or 40 years.
Here we explain how this approach helps you maximise your wealth.
You don’t need a crystal ball
Short term investing is a stressful business. To create real investment gains, you need a grip on a lot of detail about your investment choices. Then you need to time your buying and selling right, and be lucky too.
By contrast, if you invest over a longer period, you’re not trying to take advantage of fleeting ups and downs in the markets. It’s the difference between trying to catch a big wave once in a while, and letting the current carry you along steadily.
The first option takes a lot more more concentration.
You won’t sell in a panic
There’s lots of evidence that do-it-yourself investors are prone to selling early. They bail if an investment falters, and then missing out on the subsequent rebound.
Over the long term, most dips in value are noise. They will be drowned out by the overall tendency of the investment markets to recover, and generate returns ahead of cash and other assets.
With long term investing, your money stays your money
Long term investors gain from the fact that less money leaves their pot.
Firstly, you’ll avoid the transaction costs involved in regular trading, which eat into your investments.
And we’ve talked about compounding before. Leaving your investment alone enables the returns to be re-invested, pile on top of each other.
On top of that, under Ireland’s exit tax regime for investment funds, you’ll avoid a tax charge either until you exit, or at least for 8 years.
Time to think long-term and invest? Get started with Moneycube today.