The Plutus Financial Guidance guide to investing for long-term wealth
It’s proven that time spent investing in the market is more often important than the timing of the market. This is a major point when investing for long-term wealth
2020 has being a rollercoaster year in more ways than one. It’s clear that those with a diverse investment portfolio and a solid long-term strategy have come out the other side relatively unscathed.
When it comes to investing for the future, starting out early is imperative for ensuring long-term results. Whether you are years away from retirement or starting a new job, it’s crucial to have a few financial goals defined to frame your investment strategy. This way individual outlying years such as 2020, aren’t such a worry.
The unfair advantage of compound interest?
Compound interest occurs when you earn additional interest on top of simple interest by reinvesting and making regular contributions over a consistent period of time. This may sounds simple, yet it’s one of the major forgotten elements in retail investing (an individual who purchases securities for his or her own personal account rather than for an organisation).
Dollar-cost averaging when investing for long-term wealth
Making regular instalments into your investment portfolio is key to delivering long-term results. Another common yet simple strategy is dollar-cost averaging. Instead of investing all of your capital in the one go, the idea is to invest the same, fixed amounts regularly, over a long period of time.
Regardless of market conditions, this strategy allows you to increase your investment. The easiest way to understand how dollar coast averaging works is to stay engaged with your investment. Calculating how investment balances can build up over time, with a combination of regular contributions, reinvestment, and compounding returns.
Independent Financial Advice for 2020 and beyond
Increasing wealth through smart, calculated investing is a proven strategy.
Investors who are disciplined and armed with a strong, researched investment cases are poised to realise favourable returns in the years to come. Longer-term strategies mean your investment can be left to generate returns without the need to worry about the market’s peaks and troughs.
Having a clear financial plan, consistent contributions, and diversified strategy will ensure a solid growth for your nest egg. As with many things, the longer you leave it to grow the better the financial return.
Independent financial advisors such as Vince Lam are industry professionals. They specialise in building financial roadmaps tailored to you and your family’s needs, offering you peace of mind by ensuring you are on track to reach your financial goals.