If there is a word in the investing world that I love to hate, usually, in the context it is being used, is the word “long-term”. Or make that 2 words 🙂 People say “I am holding this investment/stock for the long-term”, “this stock will be a winner in the long-term”. So what’s the problem? Well, you see, this word is often associated with expected results. Like, eventually the investment will turn out to be a winner. When really, it is nothing but a reference to “time”. Time will pass. Time will come. But results are never, never, never guaranteed. Whoever makes a guarantee in investments, especially if they continue to make strong projections after the stockmarket declines but can not cite how you could have pocketed your profits in the first place is “fortune-telling”. In some countries, their “fortune-telling” may be in violation of the law (like Australia have strict rules in investment communications, requiring disclaimers and product disclosures), but for the purpose of the private investor / trader, I’d say, they are being too creative or not good in math!
The other thing is, what people believe as long-term is different from each other. Some believe
1 year is long-term, 3 years is long enough. But I myself was shocked when a financial planner friend of mine, said that long-term is 10 years. For some, it’s even kind of a moving target. 🙂
Consider this, when you buy a stock at $45 like BHP (shown below) which had reached a high of $49.81 (back in 2011), when will the investment be profitable again in the “long-term”?
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2 years on, the price it had reached was only as as high as $38.70. You could have made a good profit of 4.00 if you sold out at 49.00. These are the critical ideas you should have known
1. Invest according to your objectives
2. Study the market dynamics
3. Formulate exit strategies to take your profit
Not just investing for the “long-term” which is vague and, to me, uninspiring. When will you ever get what you truly want and deserve if you keep on going like this?
I discuss the above concepts in my Retirement Investing Webinar along with the Income Investing Workshop which are results-oriented events that will help you to keep your profits (not let them vanish into thin air!) and invest efficiently. Like when the market is in decline which I pointed out at various time in this blog even before it happened, you could have gotten out with your profits and spent the time of decline relaxing (or shopping!). Instead of wondering what happened or worse, worrying about your capital.
So join my events, let me help you meet your goals, and be happy investing. Email me at charmel@highheeledtraders.com for the next schedules.
Meantime, TRY to RETHINK your “long-term” beliefs, strategy, and objectives. Know when something is wrong and change it. Â “When you’re out there doing what you’re doing, are you just getting by”… Enjoy this video of PINK in “TRY”.
