Since I started investing, I always check to see how my stocks are doing. I check it when the market opens, during lunch hours, at market closing and even at home while watching TV.
Everytime I check on it, I always see RED. It’s always been that since i started investing two weeks ago.
But you know what? It’s okay for me. It doesn’t even concern me anymore at least for now.
Do you know why?
It’s because I’m a long term investor.
And being a long term investor, I always stick this 3 important things in my mind so that I remain focused in my long term goal. So to be a successful investor, keep in mind these 3 things;
3 things you need to remember when investing at stocks for the long term
Avoid emotional investing
Emotional investors base their buy and sell decisions on a hot tip, a news forecast, or a global financial event. A smart investor who invests in great businesses that will be here for the next 50 to 100 years knows that stock declines due to market corrections, recessions and financial crisis are once in a lifetime opportunities to accumulate more shares at cheap prices.
When buying a stock, think of it as if you’re buying not just the stock, but the whole business itself
A stock represents a share of ownership in a business. By accumulating shares in the long term, we effectively increase our share of ownership. More shares equates to more dividends paid. Dividends are a great passive income streams and income from it can be used to buy even more shares that equates to even more dividends paid. Get the picture?
Buy great businesses at a cheap price
There’s no point in buying great businesses at an overpriced value. If we want to have massive gains in our portfolio for the next 10 to 20 years, we should buy stocks of great businesses when the prices are cheap and hold on to those stocks for the long term. Sell only if the company loses its competitive advantage, or when a better investment opportunity arises.
Constantly reminding ourselves these 3 basic things while looking at our purely RED portfolio can guide us to make sound decisions and avoid poor decisions on the long term. Don’t be freak out when you see your stocks go down in value. If the company is great and you bought the stocks cheap, you’ll do good in the future. Trust the fundamentals of the business, stick to your goal and reap the rewards later on.
Happy investing!