Principles of Long-Term Investing

Principles of Long-Term Investing

Author: Stacy Auman, Director, Investment Management

During times when the market is volatile, it’s important to remember these principles of long-term investing. By being patient and having a longer view, you may be more likely to reach your long-term financial goals. If you have questions about how to apply these principles to your portfolio, talk to your financial advisor. 

Understand Market Movements - Markets have been resilient and history has shown declines have not lasted. Moving out of stocks potentially locks in losses and may prevent you from profiting from subsequent gains.

Volatility is High - Historically, bull markets have beaten bears and driven long-term gains. Investing for the long-term and having a disciplined plan can help you reach your goals.

You Control Your Emotions and Behavior - Behavioral biases may lead you in the wrong direction. Don’t let your emotional biases cloud your long-term investment plan. Investing for the long-term and resisting the urge to time the market may be a better way to work toward your goals.

Take a Longer View – Building wealth takes time, it’s important to think long-term. As part of an overall portfolio, consider stocks for their long-term growth potential. The market can be volatile, but patience and long-term investing may help you reach your goals.

Diversification Benefits - Diversification has paid off over the long run. You can’t predict the winners and losers. Diversification, however, can potentially add value and help manage risk.

Investments Should Align with Your Goals - Consider rebalancing your portfolio to stay in line with your goals and risk tolerance.

Understanding Risk is Critical - Determining the risk in your portfolio may make the difference when working toward your goals.

About the Author

Stacy joined FNBO in 1999 as an investment officer and is currently a Director with the Investment Management team in the Wealth Management group, overseeing the Client Portfolio Management team. He is responsible for managing the investment portfolios for high net worth clients, institutions, foundations and endowments, along with providing assistance to companies in selecting mutual funds for their retirement plans. He serves on the group's Asset Allocation, Manager Research, and Alternative Investment Committees.