Last year was marked by volatility in asset prices. Equity markets, currencies and commodities saw ample uncertainty. But long-term investors know that staying disciplined through short-term noise is what can have the biggest impact on your attempts to grow wealth. Sample this, at 10% every year, your money can grow up to 2.5 times in 10 years. But if you leave it for 20 years, it doesn’t just double to 5 times, rather, it grows 6.7 times. This is due to long-term compounding.
To become disciplined investors, you have to adhere to some simple yet rational rules. As we approach the start of yet another financial year, it’s a good idea to recap rules that can help you with effective investing.
Set your goal
This may sound boring and even outdated, but it remains the most critical aspect of long-term investing. No matter what age you are at, goals are the key.
