How to be a successful long-term investor

Many investors know that staying invested in an appropriately diversified long-term portfolio is one of the most powerful and consistent ways to build wealth.

And according to data from Blackrock, the longer you stay invested, the greater your likelihood of positive returns. In fact, over 1-month periods, investors made money 62.9% of the time and lost 37.1% of the time. But, if you increase the period to 10 years, investors made money 94.9% of the time and only lost 5.1% of the time.

The data is clear: long-term investors get rewarded.

But staying invested is often easier said than done, as markets can be volatile, tempting many investors to sell their assets and flee to the sidelines. Unfortunately, selling assets at low points can often be the worst financial mistake investors will make in their entire lives. So, to avoid those consequences and stay on track to reach all your financial goals and more, consider the following:

Here are 5 tips for successful long-term investing

1. Focus on your goals.

To successfully invest for the long-term, you have to start with your unique 'why.'

For most, that comes in the form of future financial goals. Whether investing for early retirement or sending your child to college, it's critical to know precisely why you're investing your hard-earned money.

This does two important things. First, it helps you identify the correct investments for your situation by determining how long you have until you need the money. For example, many college investment funds will create a phased investment portfolio known as a glide path. This lets you choose your investments based on the age of your child. So, the closer your child gets to college, the less aggressive the investments become. This is a great way to ensure that you're taking the proper risk with your investments.

Second, it helps you focus on the future instead of the present. Markets can be scary or enticing in the short run, but by zooming out and focusing on the future, investors increase their chances of staying invested for the long haul by making rational decisions.

2. Get educated

Next, you don't have to become an investment guru, but it can be valuable to understand some of the fundamentals of investing. This will help you make sense of the market's short-term movements while understanding your best options for success.

One book to consider is "The Intelligent Investor" by Benjamin Graham. Graham was a renowned investor and mentor to billionaire investor Warren Buffett. In his book, Graham does a great job of cutting through the noise to educate investors on the most important things they need to know to achieve long-term investing success.

3. Understand the impact of your emotions

One of the most significant risks investors face are their own emotions and behavioral biases.

In short, humans are wired to survive, and part of that wiring can lead us to avoid painful or uncertain experiences at all costs. But as an investor, short-term volatility and uncertainty are the price we pay for long-term success. The key is understanding that our emotions will try to push us to panic-sell to relieve the pain.

But, while that may temporarily relieve our fear and uncertainty, it can devastate our finances. Fortunately, by developing an awareness of our emotions, we can create space between how we feel and react. And as an investor, that can make all the difference.

4. Pick a strategy and stick with it

Next, it can be essential to pick an investing strategy and commit to it for the long term.

Your investment strategy will be the framework or model you use to design your portfolio for the long term. There are many strategies to choose between, but a good strategy should have elements of the following:

• Low fees to avoid cutting into returns.
• Diversification to spread out your risk.
• Enough risk to achieve your goals but not so much you jeopardize your investments.
• Tax optimization to reduce the impact of tax drag on your portfolio.

Once you've identified the right strategy for you, commit to it for the long term. If you do change strategies, typically the best time to make the change is when your current strategy is performing well, not when it is doing poorly. Make "buy low, sell high" your mantra. To be successful in the long term, you should avoid chasing short-term gains and stick to your plan.

Sam Watkins, CFP® TrueNorth Wealth

TrueNorth Wealth is a zero commission, fee-only, financial planning firm. TrueNorth Wealth specializes in high-net-worth individuals. We offer academically sound financial planning, and we educate each client on what our investment philosophy is, and why. We take an active role in helping each client examine their tax bill each year and creating meaningful strategy to manage that tax liability. If you are looking for an exceptional advisor, call TrueNorth Wealth for a no-cost consultation, today! 801-274-1820

5. Don't be afraid to ask for professional help

Lastly, don't be afraid to ask for professional help.

Just like you can choose to hire a tax professional for your tax needs or an attorney for your legal needs, hiring an investment professional for your investment needs may be worthwhile. A trusted professional can be an invaluable source of unbiased advice, especially when it's hard to separate emotions from your money. They can also help you identify your goals, create a unique investment strategy to help you reach them, and work with you to stay invested for the long run.

TrueNorth Wealth is here to help.

If you're interested in working with a fiduciary CFP® professional to help outline your unique investment plan, complete with a custom investment portfolio to deliver your financial goals, then TrueNorth Wealth is here to help.

TrueNorth Wealth is among the top Wealth Management firms in Utah and Idaho, with offices in Salt Lake City, Logan, St. George, and Boise. At TrueNorth Wealth, we focus on helping our clients build long-term wealth while maximizing the enjoyment they receive from their money. We do this by pairing our clients with a dedicated CFP® professional backed by an incredible team.

For our team at TrueNorth, it's about so much more than money. It's about serving families all across Utah and Idaho and helping them achieve freedom and flexibility in their lives. To learn more or schedule a no-cost consultation, visit our website at TrueNorth Wealth or call (801) 316-1875.

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