• White Instagram Icon
  • White Facebook Icon
  • White LinkedIn Icon
Jul 18, 2018

5 Tips For Long Term Investing Brought to You by Torre Financial

1 comment

 

1. Invest in Stocks at a young age

While Bonds are a safer bet, stocks actually provide a higher return. They are more risky than bonds as well, but being young only helps you in the long run because you can take on more risk.

 

 

2. Mitigate Losses and Diversify

If your stock takes a tumble of over 10%, think of moving your money elsewhere. Make sure you have investments in different markets, and in stocks that have high dividend yields.

"Diversification is protection against ignorance. It makes little sense if you know what you are doing." - Warren Buffett

 

 

 

 

3. If you don’t know where to Invest, Start with Indexes

Indexes are a great start for new investors, they give you a piece of the market without having to invest in one company. It’s a great way to lower your risk, and involves less research. Choose ETFs over Mutual Funds for lower fees.

 

 

4. If you invest in Stocks for over 10 years you will see positive gains

The chart below presented in Burton Malkiel's, The Random Walk Guide to Investing, shows you that after 10 years your return will be at least 1.24%. This just shows the benefits of investing early for a long period of time.

 

 

 

 

5. Watch the Market, but don’t Obsess

If you’re looking to not worry about your money and grow your savings, keep watch of the market and the news, especially the stocks you own. However, don’t obsess over market news because it’s always volatile. Only worry if something big happens.

 

 

New Posts
  • 1. Discover it® Student Cash Back: Gives you 5% cash back and a reason to maintain your GPA, and they match your first year’s cashback. On top of that they will give you $20 credit on your statement each school year if your GPA is 3.0 or higher for 5 years. This is a perfect excuse to maintain a 3.0 GPA, not only do you get $20, but you get 5% cashback at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com, or wholesale clubs (Costco, sam’s club, etc.) Learn more: https://www.discover.com/credit-cards/student/it-card.html 2. Discover it® Student chrome: For those who like to dine out and drive. $20 statement credit each school year if your GPA is 3.0 or higher for up to the next 5 years. An unlimited dollar for dollar cashback match at the end of your first year, earn 2% cash back in popular categories, plus earn 1% cash back on all other purchases. If you don’t want to use your rewards you can redeem them for cash, or if you love Amazon use your rewards on Amazon check out. Learn more of the benefits here: https://www.discover.com/credit-cards/compare/?srcCode=RJRM&ICMPGN=TOPNAV_CREDITCARD_COMPARE_TAB#student-citianchor 3. Capital One® Secured Mastercard®: The best card to help you start your credit journey. For students with a low credit score or who have no credit. All you need is at least $50 to deposit and they will refund it to you. Learn more here: https://www.capitalone.com/credit-cards/secured-mastercard/ 4. Journey® Student Rewards from Capital One®: Best for building up your credit habits and score. This perfect for Students who travel because they pay no transaction costs abroad, so get this card before studying abroad! Learn more here: https://www.capitalone.com/credit-cards/journey-student/ 5. Deserve® Edu Mastercard for Students: International students and students who’s parents are no longer putting up with your sh*t this is the card for you. Get all the perks of having a master card while getting your amazon prime student paid for, so you can have more money to spend and watch all the amazon prime you want. You get 1% unlimited cash back on All purchases, free Amazon Prime Student account, up to a $5,000 credit line, $0 annual fee, no security deposit or co-signer required (No SSN required for international students), and lets you builds credit history. Learn more here: https://www.mastercard.us/en-us/consumers/find-card-products/issuers/deserve.php
  • 1. The 10% rule, A Good Investment is One that Returns 10% or more. An investment that falls 10% will need to gain 11.11% to break even. If an Investment falls 50% it needs a 100% gain, or to double its stock price to recover your investment. 2. Understand the Exponential Relationship Young investors think that a stock will rebound and that’s why they hold on when it falls. Understanding that the gain keeps accelerating as the fall grows will help young investors sell a stock when the loss surpasses 10%. 3. Losses Hurt, Live to See Another Day Because it is more likely that a stock will not gain 10%, it is important to cut your losses once a stock falls more than 10%. Young investors have the ability to take on more risk, so cut your losses and invest in something better or reinvest (make more money). 4. Missing out on losses Can Make You Gain more If you have $10,000 and you want to make sure you capitalize on that, don’t dwell on missing gains. Rather capitalize on major losses. In the pictures below look at the impact of capitalizing on missing losses over missing gains. 5. Strategy to Mitigate your losses, Save Some Cash Don’t spend time waiting for your money to rebound in one stock, rather take the loss and invest somewhere else. Put money in other stocks and Indexes , or hold your money. Preserving capital, leaves you with cash to invest when an opportunity arises. 6. Have Discipline It’s hard to save cash during a raging bull market when everyone is making easy money. However, saving cash for when a correction occurs or when undervalued investment presents itself, can help you make major gains in the long run. 7. Prepare Preparing for a loss and containing it can ultimately help you invest longer and better. Understanding the drawbacks of losses help young investors make more calculated decisions. Learn more on Minimizing losses with Torre Financial: https://torrefinancial.com/limiting-losses-and-preservation-of-capital/