Practice Buy-and-Hold Investing in Tough Financial Times
The whole point of investing your money is to make more money. So what will you do if your investment starts to decline within a few months? Assuming it was a good investment, the answer is often to stick to it.
As personal finance blog Money Smart Guides notes, dumping investments when they start to dip slightly is a quick way to lose any unrealized profits . The ebb and flow of the economy. It `s naturally. So just because you see your ETF in red today doesn’t mean you go broke tomorrow. This was a lesson the author learned from managing clients’ investment funds with a total value of over $ 500 million. And, as the author notes, most often the purchase and retention triggered:
Those who followed our buy and hold investing philosophy have done well. In fact, most of them had recouped money lost in the 2008 market crash by mid-2011. We had one client, although he didn’t feel very well. He was a trader and made all kinds of trades based on his “guesses” and “fears.” His briefcase was always downstairs, while his wife, who followed our advice, usually did well. He asked why her income is always much better than his. He didn’t like the answer.
Does this mean that every single investment will always grow? Of course not. If you are unsure of what to invest in, ask a financial professional. However, this means that day-to-day changes do not reflect overall investment performance. Don’t be afraid to ride out the financial crisis. The only guaranteed way to lose money is to sell cheap.
What I Learned From Managing $ 500 Million | Smart money guides