W
L
BUILDING WEALTH THAT WILL
STAND THE TEST OF TIME
by Sam Hulson of First Equitable
Long-term investments tend to be less risky in the end as this
will allow you to ride out any cyclical volatility within the
relevant asset classes. By investing for the long term, you are
committing to your investments, and history has shown that
this strategy can pay off handsomely.
This is also often the best way to build wealth that stands the test
of time. It’s how you plan for retirement and build a legacy to
pass on to your children and grandchildren. But it’s important
to keep your eye on long- term goals like retiring, paying for
your child’s education and passing on some of your wealth to
your family.
Regular saving as part of a long-term investment strategy offers
a flexible, affordable solution for many people. And by keeping
some of your wealth liquid in the form of cash deposits or short-
term government securities, you should not be forced into
realising investments at what might be an unfavourable time.
LONG-TERM INVESTMENT POINTS TO CONSIDER
1. DON’T DISREGARD INCOME
Investment is about more than capital growth. For your money
to really grow, dividend income is key. The main benefit of
reinvesting income from your investments is that it can be
used to buy more shares or units within funds which have
the potential to grow in value and boost your overall returns.
Reinvesting income is essential to grow your portfolio. You will
usually have the option of reinvesting all or a portion of your
proceeds back into your original investments.
2. TAKE SOME RISK
All investments involve some degree of risk. Differences can
include: how readily you can get your money when you need it;
how fast your money will grow; and how safe your money will
be. Risk isn’t always a bad thing, especially if you are looking
for long-term rewards. Understanding risk means identifying
your own attitude towards it and identifying the different types
of risk. Rebalancing can also help to maintain the overall risk of
a portfolio in line with your needs.
3. BALANCE CHANGE AND CONSTANCY
Chasing trends at the expense of stability is not wise. The
feeling that you’re missing out on a great performance can be
very strong. Contrary to what the media may portray, you can
do well – and reach your long-term investment goals – with a
diversified approach that doesn’t require you to discover the
latest investment fad. Resist this approach. The smart money
has probably already moved on.
4. DON’T PUT ALL OF YOUR EGGS IN ONE BASKET
Diversification is key for successful long-term investing.
Spreading your assets while focussing on long-term returns is
generally a recipe for stock market success in any economic
environment. It is not a case of investing large sums of money in
one go; but investing wisely and consistently.
5. INVEST REGULARLY
Putting money into the stock market at regular intervals allows
you to ride out stock market volatility. Drip-feeding money
is the perfect solution if you want to invest but are unsure of
when to do it (think Brexit?!) and it removes the uncertainty
of putting a large sum of money into the market all at once; or
holding a large cash position for longer than is necessary – as
most people tend to do when they are fearful of investing and
market concerns. Remember, it is the time in the market that
is by far the most important consideration, not any attempts at
timing the market – a strategy fraught with danger. So called
‘perfect’ moments are few and far between...
LET US USE OUR EXPERIENCE TO IMPROVE YOURS
We have one overriding aim: that is for you to reach your long-
term financial goals. To achieve this, we combine specialist
professional investment expertise with a high level of personal
service. If you want to see how we can help you further grow
your wealth, please contact us.
You can also email any questions to me at:
[email protected]
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