Advantages of Long Term Investments

I am a believer in long-term investing. Long-term investing is something everyone should be interested in. It is no longer a very complicated subject that only economists or those with lots of money know about.

With just a few clicks, you can invest monthly and even automate the whole process.

The important thing is to find the right plan, have goals set and, most importantly, stick to it.

The important thing is to take action. If you wait for the right moment, it may never come. By sticking to a strategy and investment plan, things will work out in your favour.

You benefit from the many advantages that this way of investing offers by investing for the long term. I’ll mention below a few advantages that I consider essential.

If you are investing for the long term, I would be pleased to leave me a comment below with the advantages this way of investing offers you.

Why is it so good to choose long-term investing, though?

Read this fantastic story of how investing can teach you to invest with the right companies

1. You get rid of the jitters

This is an essential one, and in the long run, you don’t have to deal with the frustrations or momentary joys that come with the market going down or up at a given time.

When the market goes up by 10%, this won’t make you immediately think about selling out of shares. Likewise, when the market falls, you won’t think about the fact that you made a bad investment by buying that stock.

By applying this long-term investment strategy, you’ll take your mind off those investments and focus on other things.

2. You will be right in most situations

If you build your portfolio with long-term investing in mind, you have a better chance of making money.

Your portfolio will increase in value in the long run, especially if you only consider the best-known and most influential companies. This also applies to digital currencies like Bitcoin and other alt coins. These are highly volatile markets but the overall value of cryptocurrencies has risen over time. Don’t try to time the markets but rather invest in the best opporutnity and hold for the long term.

For beginners, I recommend investing in long-term indices with the highest confidence. That way, you won’t be exposed to dozens/hundreds of companies, and the risk is lower.

Diversification on indices is appropriate for the long term. If you choose the S&P 500 index, it means you will automatically invest in the top 500 US companies – which is an excellent way to diversify into equities.

I don’t know if you’ve seen a chart of the essential S&P500 index:


The index has enjoyed steady growth, especially over the past 30-40 years.

3. The importance of dividends

When you buy shares, you’ll be able to reinvest any profits you make, which will lead to higher and higher profits.

With time on your hands, you will be able to invest more and more.

Even a 3% dividend can double your money every 33 years.

If you invest in indices, you’ll enjoy dividends as much as investing in stocks.

The choice of strategy is essential for each of us, but one crucial thing is the dividends we need to consider.

4. Everyone can do it

It is so easy to apply this long-term investment strategy that everyone can do it.

All you’ll need to do is build an investment portfolio that works very well and fits your goals. The long term should mean 15 years and up. The younger you are, the better.

Every year is different. There will be years where you’ll have significant gains, others where you’ll be on the losing end.

Ideally, you should be in the market, and the average should be positive. 8-9% has been the S&P500 over the last 30 years.

5. You’ll sleep more soundly at night

By being less emotionally involved in your investments and more detached, you’ll sleep better at night.

You won’t have to wake up at a specific time to see if your portfolio has grown overnight or not.

The important thing is to choose to invest diversified in stocks or indices because even if the market is volatile for a while, it will balance out over time.

By choosing stocks that also pay dividends, you’ll increase your returns even faster.

6. Mistakes are much easier to correct

Choosing the long-term investment strategy, even in the unpleasant situation where you lose money, it’s much easier to correct investments that didn’t work out.

A good strategy is always to make sure that you choose to invest only in companies that have demonstrated their ability to innovate and have kept up over the long term.

Therefore, a long-term investment strategy is a great way to correct inevitable mistakes and learn from them.

7. You will pay less tax

When you choose long-term investing, your taxes will not be so high.

Investors who choose to buy shares for a short period and then decide to leave the market also get the highest taxes.

Fees tend to be much lower and even 0 if you don’t sell out of your portfolio by investing for the long term.

You only pay tax if you earn dividends.

For the long term, the recommendation is to invest in ETFs with dividend accumulation. That way, you won’t pay tax every time dividends are distributed, and you won’t have to get too involved.

8. Don’t think about fees so much

Unlike an active market investor, a long-term investor doesn’t think about the commission aspect because his transactions will be less frequent.

You need to make sure you don’t pay more than a 1% commission to a broker on the value of your investment.

If you invest small amounts, you can wait a few months if the commission is high.

9. The risk of missing out on opportunities decreases

A study by J.P Morgan concluded that people who invested from 31 December 1993 to 31 December 2013 consistently in the stock market, using long-term investments, managed to make a 483% return.

If these people had missed the best 30 days of this period, the profit would have been 20% lower.

It doesn’t matter exactly when you start – it matters that you start. That’s all!

We’re missing the action most of the time. Whether we start in a downturn or start in a boom, the important thing is to begin investing.

With a strategy like Dollar-Cost Averaging – you’ll manage to steer clear of these fluctuations.

10. Set a goal

Setting investment goals is just as crucial as investing itself.

You need to think about why you are investing in stocks in the first place. Then you also need to think about whether or not you have money to use to invest. If you are investing money that you will need in the next five years, investing in stocks is most likely not a good decision.

On the other hand, if your desire is to retire and you want to invest for ten years or more in stocks, chances are better that you’ll be able to make a long-term gain.

For me, long-term means 15 years and up.

The most significant returns come after 20 years of investing.

11. Automate everything

As far as possible, automating the investment process is very important, so you can, for example, transfer an amount of money to your investment account every time you get your salary.

Doing it this way will make investing easier.

Another advantage of this automation is that you will also take advantage of dollar-cost averaging. For example, you will buy shares at different prices, and if the shares have lower prices, you will be able to buy more.

12. Focus on the things that are really important to you

Ideally, you shouldn’t always check the status of your investments, but only from time to time.

You can make a schedule for checking your investments and only check them then.

I check my passive investments very rarely, even every 3 months. Only in times of uncertainty do I check more often to buy more.

Periods of crisis I consider perfect for accumulating more.

13. Keep a long-term perspective

The market will have both ups and downs, so the most important thing is to take the long view. Don’t panic when investing for the long term. The market has always had its moments of decline, but it has enjoyed continuous growth over the long term.

14. Stay calm

Regardless of what happens to the market, the most important thing is to keep calm and try to limit as much as possible the impulsive actions that will always tend to occur when things are going badly or even very well.

You can control how you react to some situations, but you can’t control what happens to the market.

15. Always enjoy life

For me, long-term investing helps me truly enjoy what is important to me.

I am enjoying my family and the projects I’m involved in.

Even though it might be a bigger payoff if I spent more time every day or invested for the long term, but that’s not my intention.

I want to enjoy life, not be pressured by it and enjoy an average annual return in line with my personal goals.


Investing is not a taboo thing enjoyed only by the most experienced who spend hours on analysis.

If you invest a little in your education, read a few books, go through courses and manage to build a balanced portfolio according to your goal, then things will be straightforward.