# Long-term investing isn’t easy – here’s how to be successful Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2021-05-31 Category: INVESTING Category URL: https://financedigest.com/category/investing Meta Title: Long-term Investment Strategies: How to Build Wealth and Meta Description: Read how to build personal wealth and security over time with a clear investment strategy, focusing on quality, value and momentum for strong returns. URL: https://financedigest.com/long-term-investing-isnt-easy-heres-how-to-be-successfulhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/payment-is-made-1736838305104-compressed.jpg) _By **Ben Hobson,** Markets Editor,_ [_Stockopedia_](https://www.stockopedia.com/) Read the financial headlines and it would be easy to believe that an investment fortune can be made with just one trade. While it’s true that some people do get lucky with one “magic” stock during their investment journey, most successful investors build their personal wealth and security over the long term. Investing is mostly a waiting game. Sticking to a predetermined strategy is [key to success](https://www.financedigest.com/battling-uncertainty-is-the-key-to-property-investment-success.html "Battling uncertainty is the key to property investment success") in this field – while not letting emotions compromise your judgement. In the modern [age of investing](https://www.financedigest.com/investing-age-infobesity-separating-sentiment-market-noise.html "Investing in an age of ‘infobesity’ – separating sentiment from market noise"), this isn’t easy. New and experienced investors are being bombarded with more information and ideas than ever before. But in all this noise [comes the increased](https://www.financedigest.com/food-fiber-market-to-exhibit-increased-demand-in-the-coming-years.html "Food Fiber Market to Exhibit Increased Demand in the Coming Years") risk of mistakes and misinformation – making the idea of getting quick money sound all the more tempting. That’s why Ben Hobson, Markets Editor at [Stockopedia](https://www.stockopedia.com/) shares his insights on how to manage your portfolio for the long run. **Having a [plan and sticking](https://www.financedigest.com/oil-prices-take-a-breather-opec-sticks-to-output-plans.html "Oil prices take a breather, OPEC+ sticks to output plans") to it is vital** [Investment strategies](https://www.financedigest.com/investing-in-a-first-party-data-strategy-can-save-the-day-for-retailers.html "Investing in a first-party data strategy can save the day for retailers") naturally change over time and making mistakes is unavoidable as markets fluctuate. Understanding the [risks ahead of time and looking at the bigger picture can help you manage the highs and lows so that you stay](https://www.financedigest.com/staying-ahead-of-risk-this-black-friday.html "Staying Ahead of Risk This Black Friday") committed for the long term. Not only will this give you confidence, but it will help you manage the fear of [loss that can lead some investors](https://www.financedigest.com/investors-flee-uk-bonds-pushing-gilts-to-huge-monthly-loss.html "Investors flee UK bonds, pushing gilts to huge monthly loss") to throw in the towel. Everyone is guilty of dipping into [savings to fit their needs](https://www.financedigest.com/how-much-do-i-need-to-save-for-retirement.html "How much do I need to save for retirement?") – whether it be for a treat or a surprise expense – but it’s vital to know precisely how much you’re willing to invest. For the most part, the longer you remain invested, the more you’re likely to benefit from compounding [returns over time](https://www.financedigest.com/ogrady-to-return-to-bank-of-ireland-as-ceo-irish-times.html "O’Grady to return to Bank of Ireland as CEO – Irish Times"). So, being confident that you can afford the amount you have invested today, and in the years that follow, is paramount. **Be strategic** Investors and investment strategies are all different and [investing advice](https://www.financedigest.com/investment-advice-moving-towards-a-new-model.html "Investment advice – moving towards a new model") takes many forms and can seem confusing to those starting out. Yet the historical drivers of [stock market profits](https://www.financedigest.com/compelling-tips-to-make-profitable-investments-in-the-stock-market.html "Compelling Tips to Make Profitable Investments in the Stock Market") are surprisingly consistent. Keep it simple and create a strategy around the three factors that many professional investors focus on – Quality, Value and Momentum. This way, you’re aligning with factors that have historically driven the strongest performances in the [stock market](https://www.financedigest.com/the-secret-to-stock-market-success.html "The Secret to Stock Market Success") over time. Remember that high profitability and [cash flows are markers of a strong business](https://www.financedigest.com/europe-burns-cash-to-help-businesses-in-deepening-energy-crisis.html "Europe burns cash to help businesses in deepening energy crisis") and are likely worth looking at. Be vigilant of low or no profits, thin margins, debt and precarious balance sheets – [businesses with these are usually worth](https://www.financedigest.com/tough-times-and-risky-business-which-emerging-market-assets-are-a-bet-worth-taking.html "Tough times and risky business – which emerging market assets are a bet worth taking") avoiding. Valuation is vital when choosing a stock. Unloved shares that can be bought for a snip may [offer supersized returns](https://www.financedigest.com/bellways-kent-wharf-offers-excellent-returns-for-city-bonuses.html "Bellway’s Kent Wharf Offers Excellent Returns For City Bonuses"). But paying a fair [price for higher](https://www.financedigest.com/wall-street-seen-opening-higher-but-u-s-recession-priced-in.html "Wall Street seen opening higher but U.S. recession priced in") quality or promising growth is just as viable. Finally, looking at trends and history can help you gauge a stock’s performance. Positive momentum is one of the most [significant return drivers in investing](https://www.financedigest.com/hermes-bolsters-sme-service-with-significant-investment.html "HERMES BOLSTERS SME SERVICE WITH SIGNIFICANT INVESTMENT"). [Share prices that are rising](https://www.financedigest.com/shares-slip-yields-rise-as-u-s-data-sparks-rate-hike-concerns.html "Shares slip, yields rise as U.S. data sparks rate hike concerns") strongly often continue to do so. **Diversification works best** [Stocks, sectors and markets move in their own cycles](https://www.financedigest.com/invest-in-infrastructure-to-escape-the-starvation-cycle-warns-leading-nonprofit-sector-strategist.html "Invest In Infrastructure To Escape The ‘Starvation Cycle’, Warns Leading Nonprofit Sector Strategist"). When one zigs, the other zags, so think about the roles that each [investment type plays in your portfolio](https://www.financedigest.com/three-fundamental-tips-to-enhance-your-investment-portfolio-performance.html "Three fundamental tips to enhance your investment portfolio performance") and how many positions you feel comfortable with managing. Any [investor worth their salt would recommend spreading out finances](https://www.financedigest.com/optable-closes-20-million-series-a-financing-broadens-investor-syndicate-in-new-round.html "Optable Closes Million Series A Financing, Broadens Investor Syndicate in New Round") across a range of investment types and trying out different strategies. Diversification between different market-cap sizes, [investment styles, industry sectors and even international geographies can protect you from being too exposed to unnecessary risks and can smooth out your investment returns](https://www.financedigest.com/ils-investment-returns-continue-to-outperform-according-to-aon-insurance-linked-securities-report.html "ILS investment returns continue to outperform, according to Aon insurance-linked securities report") over time. For example, having your money [invested in funds and bonds can be less risky than a volatile stock, but having both could help limit losses and increase](https://www.financedigest.com/investments-in-the-caribbean-increasing-due-to-cbi-demand.html "Investments in the Caribbean Increasing Due To CBI Demand") the chances of a positive return. **Don’t sweat the small stuff** When your portfolio is in place, understanding where to prioritise your attention lets you [rest easy at night rather than fretting over small](https://www.financedigest.com/queens-final-resting-place-is-a-small-chapel-in-historic-windsor-castle.html "Queen’s final resting place is a small chapel in historic Windsor Castle") changes. One or two [big winners can quickly dominate your allocation, but those big winners can also be life changing](https://www.financedigest.com/from-boom-to-bottom-and-now-big-change-renault-and-nissan-reshape-alliance.html "From boom to bottom and now big change: Renault and Nissan reshape alliance"). Don’t get too caught up in your portfolio performance – you [need to let your investments](https://www.financedigest.com/5-reasons-why-women-need-to-get-into-property-investing.html "5 Reasons why women need to get into property investing") breathe. If anything, getting too caught up in the losses can make you miss an uptick in value [around the corner](https://www.financedigest.com/hotel-hotspots-for-2017-whats-around-the-corner-for-the-uks-hotel-sector.html "Hotel hotspots for 2017 – what’s around the corner for the UK’s hotel sector?"). Overtrading can not only fuel emotional investing, but fees and charges can quickly mount. Trading fees all chip away at your portfolio, so [avoid throwing money](https://www.financedigest.com/mistakes-to-avoid-while-choosing-a-private-money-lender.html "Mistakes To Avoid While Choosing a Private Money Lender") at unnecessary trades – especially when you’re bored. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---