“10 Tips for Successful Long-Term Investing”
July 29, 2019
“Selling a Loser
– There is no guarantee that a stock will rebound after a protracted decline, and it’s important to be realistic about the prospect of poorly-performing investments. And even though acknowledging losing stocks can psychologically signal failure, there is no shame recognizing mistakes and selling off investments to stem further loss…
Don’t Chase a Hot Tip
Regardless of the source, never accept a stock tip as valid. Always do your own analysis on a company, before investing your hard-earned money. While tips sometimes pan out, long-term success demands deep-dive research…
Resist the Lure of Penny Stocks
Some mistakenly believe there’s less to lose with low-priced stocks. But whether a $5 stock plunges to $0, or a $75 stock does the same, you’ve lost 100% of your initial investment, therefore both stocks carry similar downside risk. In fact, penny stocks are likely riskier than higher-priced stocks, because they tend to be less regulated…”
https://www.investopedia.com/articles/00/082100.asp
This is some good advice. I’d like to add strategies for long term stocks are different from those of day trading or short term stocks. I have experience with both types of investments but I’m more familiar with short term trades at this point. When trading short term thinks like dividend and gradual growth doesn’t matter as much in my opinion. In that case you want to look for growth spurts and trends. This is near the polar opposite of long term investments.
Holding stocks long term you want to look for things like dividend, stability, how much room for growth the company has. Even if a stock has good stability if the market is saturated you’d at the very least lose short term. The company’ll be more likely to break even or post negative profits.
It’s a little difficult to know when to sell a long term stock. Some of it depends on how long a person intends to keep a stock. If a person plans to hold on to a stock for say 20 or 30 years they wouldn’t mind large market corrections in general. Even if there was a 50% market correction (drop) that person may decide to buy more stock at that time.