What are the best long-term investment strategies?
Asked 4 years ago
I plan to keep my shares for the long haul, but my portfolio has gone down by 15%. Could anyone with a seasoned mind look at what stocks I have and let me know if they are good to hold?
Andia Rispah Igobwa
Monday, April 12, 2021
Taking a buy-and-hold approach to investments is both the simplest and most dependable strategy to achieve substantial portfolio returns. But that approach still leaves plenty of flexibility regarding individual companies and investment themes you prioritize.
The three core long-term investing strategies you can implement are:
- Growth strategy - focuses on companies that are expanding faster and appear primed to continue generating impressive results. They may not be profitable now but display signs of potential growth.
- Value strategy - focuses on buying company stocks that seem undervalued based on their fundamentals such as profit margin, revenue, and competitive strength. This tactic helps reduce your investment risks while creating opportunities for impressive portfolio gains.
- Dividend strategy - Prioritizes owning stocks that return value to shareholders regularly in cash dividends. It can also be a long-term investing strategy by having all dividends re-invested, and over time, you can buy more shares increasingly using only dividends.
Most investors opt for a mixed approach to portfolio construction by combining value, growth, and dividend stocks to create a balanced portfolio.
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