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Youll also see many predictions about which investment is going to the moon next.
However, the best investment results often come from a more boring approach.
Hershort TikTok videosaid: In October 2019, I opened a brokerage account.
I made a purchase of 70 shares of a boring index fund of $19,641.
Those 70 shares are now worth $36,896.
Thats a 53% return for the last four years.
When it comes to investing, boring is a good thing.
Long-term investors take advantage of compound interest, which is when your initial investment generates interest that gets reinvested.
The next time that investment earns interest, your initial investment and the previous interest generate interest.
Consistency
Being consistent and sticking to your investment strategy is another principle for long-term success.
Making regular fixed investments over a long period of time is called dollar-cost averaging.
The discipline of making regular investments will also keep you on track to reach your financial goals.
This FOMO causes many investors to make abrupt decisions that often result in losses, according to theU.S.
Securities and Exchange Commission.
Being able to make rational decisions requires you to regulate your emotions.
Controlling feelings of greed and fear will lead you to more sound decision-making.
Diversification
Diversification is an investment strategy that reduces your risk.
It means spreading out your investments over multiple asset classes to offset market volatility.
If the price of one asset drops, another area may rise, offsetting the negative effects.
Knowledge
Knowing what youre putting your money into is essential forlong-term and short-term investorsalike.
Educated investors can assessdifferent market outcomesby monitoring trends and making the appropriate decisions.
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