“For the vast majority of folks, set it and forget it is the best long-term investment strategy.” John Stoj, OVerbatim Financial founder

Long term investing may not be glamorous, but it works.

Investing consistently over a long period of time will give you a chance to profit from the growth in the stock market. And, the longer your capital money is invested in assets, the more potential it has to grow. ”

Think in terms of decades when investing instead of days and you’ll be wealthy before you know it! 

When you sell a stock and earn a profit in the stock market, you are required to pay capital gains tax at either short-term or long-term rates.

If you held your investment for a year or less, you pay a short-term capital gains rate that that can be as high as 37%.

If you invested for the long term (over a year), you’ll unlock lower tax rates  of 0%, 15%, or 20% depending on your income and filing status. By holding your investments over the long-term, you have the potential to make more money and pay less in taxes. 

10 long-term investing strategies that work:

• Have a financial plan – Having a plan is one of the most important considerations to make before investing for the long term. A plan puts your financial goals, as well as when and how you want to reach them, into context. It can also assist you to avoid being swayed by emotions when making investment decisions or during periods of high market volatility.
• Start investing as early as possible – When you start early … not only do you get the compounding effects of the capital, but you also create the opportunity to buy at an average cost over time.
• Don’t try to time the market.
• Invest in what you understand.
• Add a 401(k) match to your mix – free money is the only guaranteed, risk-free home run you’ll ever get. Yet many people still don’t participate even when they have access to a 401(k) with an employer match.
• Set up and stick with sound cash-flow management – Setting up automatic retirement savings contributions is one way to establish a cash flow strategy. But you can also apply the strategy of automatically investing money (each month at least) during your working years to other areas. You may want to establish a rainy day fund of three to six months.
• Set it and forget it with funds.
• Make stocks a cornerstone of your strategy.
• Diversify for a smoother ride.
• Rebalance only when necessary.

References:

1. https://www.fool.com/investing/2020/11/21/mellody-hobsons-best-investing-tip-make-wealthy/
2. https://money.usnews.com/investing/slideshows/long-term-investing-strategies-that-work