top of page
  • Writer's

Basic Rules for Long-Term Investing - Necessary Steps for Successful Investing

Basic rules for long-term investment

Long-term investment refers to the investments you will make to evaluate your savings for a long time. Long-term investments can often offer higher returns because they are less risky than short-term investments. However, there are basic rules that you should pay attention to when making long-term investments.

These rules include setting your investment goals, diversifying, knowing the markets and investment instruments well, being patient and understanding the risks. Following these rules while making your investments will help your investments to be successful and reach your goals.

Basic rules for long-term investment

Those who are considering making long-term investments can be more careful and have an idea when choosing the areas to invest by reading the basic rules we have mentioned below.

Set your investment goals

Identifying your investment goals will help you understand where you should focus and what you are aiming for when making your investments. Your investment goals may change based on your priorities in life, your financial situation, and your future dreams.

For example, you may want to retire soon and you may want to make a long-term investment to achieve this goal. Or, you may want to invest in your child's education. There can be many different goals like this, and you should choose the right investment tools to achieve these goals.

Setting your investment goals will help you monitor your investments regularly and achieve your goals. It also allows you to measure the success of your investments and revise your investment strategy when necessary.


Diversify your portfolio by investing in various investment instruments

Diversification means investing in different investment vehicles to spread the risk of your investments. If you invest in the same investment instrument, you run the risk that your entire investment will lose value if that investment instrument loses value. However, if you invest in different investment vehicles, it can reduce the risk that other investment vehicles will appreciate in value when one investment vehicle loses value.

To diverge, you need to create a portfolio of different investment vehicles. For example, you can invest in different investment vehicles such as stocks, bonds and bills, real estate, gold. You can also further increase your diversification by investing in different sectors and countries.

While diversification reduces the risk of your investments, it can also reduce your potential earnings. Therefore, it is important to diversify, taking into account your investment objectives and risk tolerance. For long-term investments, diversification can help you achieve more stable performance by reducing the risk of your portfolio.


Talk to an expert advisor or financial planner

An expert financial advisor or planner can help you set and achieve your investment goals. Financial advisors can recommend the most suitable investment strategy for you by evaluating your financial situation, risk tolerance and investment objectives. It can also help you monitor the performance of your investments and update your strategies.

Because financial advisors have a broad knowledge of markets and investment instruments, they can help you make the right investment decisions. They are also constantly updated on the price movements of investment instruments and the latest developments in the markets, which can help you manage your investments properly.

However, remember that financial advisors or planners are also human and can make mistakes. When making investment decisions, it is also important to determine a strategy that suits you and control the results. It is important to create an investment strategy that suits you, taking into account the recommendations given to you by financial advisors or planners.


Get to know the markets and investment tools well

Knowing the markets and investment instruments well can help you make the right decisions when making long-term investments. You need to have information about how the instruments you want to invest work and their price movements. It's also important that you understand the performance, risks and potential returns of the instruments you want to invest in.

Knowing about the markets can help you understand how markets work and what factors cause price movements. In addition, following the latest developments and trends in the markets can help you make investment decisions.

It is also important to do research on the instruments you want to invest in. You need to understand which instruments are more suitable for long-term investments, their risk and return profiles, and their performance. It can also be helpful to be familiar with price movements and trends.

Knowing the investment tools and markets well allows you to make the right decisions and improve the performance of your long-term investments.


Understand the risks and determine the appropriate risk level based on your investments

Risk management is an important rule for long-term investments. Each investment vehicle has a different level of risk, and this level of risk also determines the potential return on the investment.

Based on your investment objectives and risk tolerance, you should determine an appropriate level of risk for your investments. High-risk investments may offer higher potential returns but also involve a higher risk of loss. Lower risk investments may offer less potential return but also involve a lower risk of loss.

Understanding risk and determining an appropriate level of risk based on your investments allows your investment portfolio to perform more consistently and increases the success of your long-term investments. Also, complying with a certain level of risk can help you create a more accurate and consistent strategy for your investments.


Be patient and avoid snap decisions

Being patient is an important rule for long-term investments. Markets and investment instruments are constantly changing, and short-term fluctuations can make investors prone to snap decisions. However, for long-term investments, it is very important to avoid snap decisions.

Long-term investments are investments made regularly over a period of time, and short-term fluctuations in the markets are usually temporary. Keeping your investments patiently without making snap decisions can enable you to get a higher return over a longer period of time.

You should also carefully examine your investment objectives, risk tolerance, and performance of your portfolio before making snap decisions. More knowledge and a thoughtful approach to making the right decision can help you make more successful and consistent investments.

Understand the risks and determine the appropriate risk level based on your investments

Invest regularly

Regular investment is a rule of thumb for long-term investments. Small amounts of investments made on a regular basis build up over time, allowing you to invest large amounts. In addition, regular investments reduce your exposure to market fluctuations and ensure that your investments perform consistently over a longer period of time.

Regular investing can also be facilitated by options such as opening an investment account or joining a mutual fund. This allows you to invest regularly and keep your portfolio updated regularly.

In summary, regular investment is an effective strategy for long-term investments and can enable you to earn a higher return on your investments over a longer period of time.


Be prepared for price fluctuations

Price fluctuations are defined as sudden and unexpected changes in the price of investment instruments. Price fluctuations can be triggered by factors such as various economic, political or world events.

For long-term investments, it is very important to be prepared for price fluctuations. This can help your investments not be affected by sudden changes in price and not impair the long-term performance of your investments.

To be prepared for price fluctuations, it is recommended to diversify your portfolio into various investment instruments. In addition, keeping up-to-date information on the price of your investments regularly and following the trends in the markets allows you to be prepared for price fluctuations.

Price fluctuations can be seen as a threat to long-term investments, but they can also present opportunities. During price fluctuations, you can invest at affordable prices and improve your long-term performance.

In summary, price fluctuations should be accepted as a reality for long-term investments and one should be prepared.