# What makes a good long-term investment strategy? Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2021-08-13 Category: INVESTING Category URL: https://financedigest.com/category/investing Meta Title: Maximise Long-Term Returns with Investment Strategies Meta Description: Discover expert advice on building a long-term investment strategy for higher returns. Learn how to navigate the stock market with patience and planning. URL: https://financedigest.com/what-makes-a-good-long-term-investment-strategyhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/sbi-300002592-jpg-1736838019896-compressed.jpg) _By Ben Hobson, Markets Editor,_ [_Stockopedia_](https://www.stockopedia.com/) Thanks to social media feeds and 24/7 news cycles, there’s more buzz around stocks and opportunities than ever before. And all that buzz can make it difficult to focus on the long-term. While it’s true that some investors get lucky with a ’golden’ stock, most successful investors gear their portfolios for the long run. After all, patience is a virtue. That’s why Ben Hobson, Markets Editor at [Stockopedia](https://www.stockopedia.com/) shares his insights on how to manage your portfolio over the long-term for greater returns. **It** [pays to have a plan](https://www.financedigest.com/uk-leadership-favourite-truss-u-turns-on-pay-plan-in-first-big-misstep.html "UK leadership favourite Truss U-turns on pay plan in first big misstep") Depending on the forces shaping the market, [investment strategies](https://www.financedigest.com/2018-it-security-predictions-methods-for-attacks-investment-areas-cybersecurity-strategies.html "2018 IT Security Predictions-Methods For Attacks, Investment Areas & Cybersecurity Strategies") naturally adapt and evolve over time in response. As a general rule, the longer your [money is invested](https://www.financedigest.com/ethical-property-investment-can-your-money-do-more.html "Ethical property investment: Can your money do more? ") in a well-balanced portfolio, the harder it’ll work. Having a solid understanding of your [financial affairs and knowing what you can safely](https://www.financedigest.com/how-can-the-financial-sector-safely-use-the-iot.html "How can the financial sector safely use the IoT?") invest upfront is the best starting point before making any snap decisions. Remember to factor in lifestyle [changes and events which could affect your financial](https://www.financedigest.com/financial-risks-of-climate-change-overplayed-senior-hsbc-banker-says.html "Financial risks of climate change overplayed, senior HSBC banker says") position. It can also be a good idea to [set yourself a milestone to reach with your investment](https://www.financedigest.com/embracing-cloud-computing-how-and-why-organisations-are-set-to-invest-more-in-cloud-computing-in-2023.html "Embracing Cloud Computing: How and why organisations are set to invest more in cloud computing in 2023") before you decide whether to sell; this can help you avoid knee-jerk reactions led by emotion. **[Building your custom](https://www.financedigest.com/effectively-efficiently-build-financial-trust-customer-journey.html "Effectively and efficiently build financial trust on the customer journey") strategy** Everyone is different – and so are [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"). With [investment advice coming](https://www.financedigest.com/buyers-shun-city-centres-for-country-villas-when-it-comes-to-lifestyle-investment-in-iberia.html "BUYERS SHUN CITY CENTRES FOR COUNTRY VILLAS WHEN IT COMES TO LIFESTYLE INVESTMENT IN IBERIA") hard and fast, especially unvetted via social media, it can be tricky to judge your next move. However, it’s always important to remember that historical drivers of [stocks](https://www.financedigest.com/mutual-funds-vs-stocks-which-is-better.html "stocks") are consistent. There’s a simple formula that most seasoned investors use, centred around three key points – Quality, Value and Momentum. By making sure your investment choices tick these boxes, you can [expect strong](https://www.financedigest.com/ea-lowers-bookings-expectation-on-strong-dollar-gaming-slowdown.html "EA lowers bookings expectation on strong dollar, gaming slowdown") performances in the long-term. When evaluating prospective stocks, using markers like high profitability, strong [cash flows and a durable 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") model are useful. Be wary 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. Searching for the right stock should be thorough. Trends are a significant performance indicator – looking at its history and [spotting signs](https://www.financedigest.com/keeping-business-safe.html "Keeping your business safe : How to spot the signs and avoid the latest scams") of positive momentum. [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. [**Weathering the storm**](https://www.financedigest.com/how-digital-commerce-merchants-can-weather-the-economic-storm.html "How Digital Commerce Merchants Can Weather the Economic Storm") Business sectors, [stocks and markets](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") move at their own pace and are often interlinked. Changes in one area can [directly affect](https://www.financedigest.com/factors-that-affect-the-direction-of-the-stock-market.html "Factors That Affect the Direction of the Stock Market") another. So, think about the [role each investment you make plays](https://www.financedigest.com/why-the-bank-branch-still-has-a-role-to-play-for-consumers.html "Why the bank branch still has a role to play for consumers") in your portfolio. Any [investor worth their salt would recommend diversifying investments](https://www.financedigest.com/investment-inspection-trips-bring-liverpool-to-life-for-asian-property-investors.html "Investment Inspection Trips bring Liverpool to life for Asian property investors") across a range of investment types to protect against volatility. Diversification can take many forms. Looking at markets in new international geographies, different industries and varying market-cap sizes, for example, minimises [exposure to unnecessary risks](https://www.financedigest.com/preventing-an-operationally-crippling-ransomware-attack-do-you-know-where-your-risk-exposure-lies.html "PREVENTING AN OPERATIONALLY CRIPPLING RANSOMWARE ATTACK – DO YOU KNOW WHERE YOUR RISK EXPOSURE LIES?") and maximises opportunities. Another example is the type of investment itself. Funds and [bonds can be less risky than a volatile stock](https://www.financedigest.com/stocks-bonds-extend-rally-on-hopes-rate-hikes-ease.html "Stocks, bonds extend rally on hopes rate hikes ease") but, having both could help limit losses and increase the chances of a positive return. **A perfect balance** Once your portfolio is [put together](https://www.financedigest.com/10-ways-to-put-together-a-killer-investment-pitch.html "10 WAYS TO PUT TOGETHER A KILLER INVESTMENT PITCH"), take a moment to prioritise your investments. This way, you’re not worrying over the smallest of market fluctuations. It’s vital to not get too emotionally [invested in your portfolio’s performance](https://www.financedigest.com/three-fundamental-tips-to-enhance-your-investment-portfolio-performance.html "Three fundamental tips to enhance your investment portfolio performance"). Giving your investments room to breathe is important. A rash decision can leave you missing an uptick in value that could be right [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?"). There is a common misconception that [investors are glued to their investments](https://www.financedigest.com/new-brexit-guide-surrenden-invest-helps-property-investors-see-past-politics.html "New Brexit Guide from Surrenden Invest helps property investors see past the politics") and capitalising on every fluctuation possible. Unfortunately, this is portrayed as the only viable way to trade all too often. Overtrading can not only fuel emotional investing, but fees and charges can quickly mount up. 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 just can’t find anything better to do. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---