• About
  • Advertise
  • Write For Us
  • Privacy Policy
  • Contact Us
Subscribe
Smart Investor Malaysia
Advertisement
  • Start Here
    • All
    • Guides
    • How-Tos
    • Analysis

    PropertyGuru: Malaysian Residential Property Market Continues To Face Challenges As Supply And Demand Declines

    Fed Turns The Tide In War On Inflation, But It’s Too Early To Declare Victory

    The Smart Investor’s Guide to Insurance

    Highlights: Malaysia’s Revised Budget 2023

    4 Reasons Why You Need To Invest In ETF

    SPY vs SPUS: A 2023 Comparison of S&P 500 ETFs

    It's time to embed ESG into your investment portfolio. | Credit: nattanan23 via Pixabay

    The Smart Investor’s Guide to ESG

    (L-R) Kenny Yee, Head of Research and Thong Pak Leng, Vice President of Equity Research

    Post 2023 Budget And Q4 Market Outlook Commentary By Rakuten Trade

    Image by dashu83 on Freepik

    Why This Economic Cycle Is Different?

    • Guides
    • How-Tos
    • Analysis
  • Investments
    • All
    • Asset Management
    • Stocks
    • Islamic Finance
    • Alternatives Investments

    Malaysia’s dance with FAANG Giants

    AIIMAN menjalin pakatan strategik dengan Bank Islam sebagai Rakan Pengedar Untuk Luaskan Capaian Kepada Produk Kekayaan Syariah

    E-mail Popup Warning Window Concept

    ICMR Research Series: Safeguarding Malaysian Investors Against Financial Scams

    How Is The Malaysian Property Industry Doing Post-Covid?

    What Can We Learn From The “Equity Risk Premium” About The Prospects For Equities Vs Bonds

    SC-Bursa: Measures To Boost Capital Market Vibrancy And Competitiveness

    Still Worth Investing In Sustainability In 2023?

    ICMR Research Series: Unexpected Life Situations And Industry Issues Drive Vulnerability For Malaysian Investors

    Bursa Malaysia Expands “Approved Securities” Criteria To Boost Market Vibrancy

    • Asset Management
    • Stocks
    • Islamic Finance
    • Alternatives Investments
  • Personal Finance
    • All
    • Cash Management
    • Grow Your Wealth
    • Protect Your Wealth
    • Distribute Your Wealth
    • Behavioural Finance

    Property Tussle: Being Left Homeless After Sister’s Death

    Employment Opportunity Fraud Syndicate: Lidt Cooperation Advertising Sdn Bhd Or Lidl Cooperation Advertising Sdn Bhd

    What You Need To Know About The Insurance Industry In Malaysia

    5 Rules For Malaysians To Improve Their Financial Wellbeing

    Tears In Heaven: Who Protects Your Insurance Money?

    Patterns And Types Of Cybercrime In Malaysia From 2016 To 2021: Part 2

    Patterns And Types Of Cybercrime In Malaysia From 2016 To 2021: Part 1

    ICMR Research Series: Millennials And Gen Z Must Plan Early For A Better Retirement In A Changing World Of Work

    The State Of Malaysia’s Education And Financial Literacy Among The Youths

    • Cash Management
    • Grow Your Wealth
    • Protect Your Wealth
    • Distribute Your Wealth
    • Behavioural Finance
  • Enterprise
    • All
    • Startups
    • Entrepreneurs
    • SMEs
    • Leadership
    • Business Planning
    From left Eizzar Supiar, AVP - Evaluation, Cradle_ Adlin Yusman, Co-Founder of BeMalas_ Suthenesh Sugumaran, Co-Founder of BeMalas_ and Joyce Wee, Former Executive Director of Etalage

    Cradle Circle: Bridging Visionary Startups and Investors in Second Series Event

    Gorgeous Geeks Marks 15 Years of Empowering Women in Technology

    MDDA Celebrates 30 Years of Industry Excellence

    DNA Mapping, A Revolutionary Medical Breakthrough

    Thomson Ushers In New Treatment for Spinal Muscular Atrophy

    Authority Institute’s Maverick Foo named Vistage Malaysia’s Speaker of the Year

    Digital Niaga Empowers Local Businesses With Digital Access To Financial Solutions for Micro, Small Medium Enterprises’ (MSMEs)

    Bizsu: On A Mission To Cool Down The World And Save The Environment

    Management team of Web Bytes Sdn Bhd (from L-R) at the Launch of Xilnex Retail Tech Experience Center: Ng Tiong Kuan, COO; Lee Ming Kew, CFO; Ooi Boon Sheng, CEO; Eng Aik Kian,  CTO (far right); Tan Wei Kit, Business Development Director (2nd from right) with Lee Kah Hin Jerry, Chief Investment Officer of GD Express Bhd (4th from right) and Ken Phua, Deputy President of MRCA (3rd from right)

    Web Bytes Unveils Wonders Cafe As The Hub For Xilnex Retail Tech Experience Center

    • Startups
    • Entrepreneurs
    • SMEs
    • Leadership
    • Business Planning
    • Fintech
  • Property
    • All
    • Startups
    • Entrepreneurs
    • SMEs
    • Leadership
    • Business Planning
    From left Eizzar Supiar, AVP - Evaluation, Cradle_ Adlin Yusman, Co-Founder of BeMalas_ Suthenesh Sugumaran, Co-Founder of BeMalas_ and Joyce Wee, Former Executive Director of Etalage

    Cradle Circle: Bridging Visionary Startups and Investors in Second Series Event

    Gorgeous Geeks Marks 15 Years of Empowering Women in Technology

    MDDA Celebrates 30 Years of Industry Excellence

    DNA Mapping, A Revolutionary Medical Breakthrough

    Thomson Ushers In New Treatment for Spinal Muscular Atrophy

    Authority Institute’s Maverick Foo named Vistage Malaysia’s Speaker of the Year

    Digital Niaga Empowers Local Businesses With Digital Access To Financial Solutions for Micro, Small Medium Enterprises’ (MSMEs)

    Bizsu: On A Mission To Cool Down The World And Save The Environment

    Management team of Web Bytes Sdn Bhd (from L-R) at the Launch of Xilnex Retail Tech Experience Center: Ng Tiong Kuan, COO; Lee Ming Kew, CFO; Ooi Boon Sheng, CEO; Eng Aik Kian,  CTO (far right); Tan Wei Kit, Business Development Director (2nd from right) with Lee Kah Hin Jerry, Chief Investment Officer of GD Express Bhd (4th from right) and Ken Phua, Deputy President of MRCA (3rd from right)

    Web Bytes Unveils Wonders Cafe As The Hub For Xilnex Retail Tech Experience Center

    • First Time Home Buyers
    • Central
    • Northern
    • Southern
    • Sabah & Sarawak
    • Regional / Global
    • Feature
  • ESG
  • Lifestyle
  • News & Events
  • Bahasa Melayu
No Result
View All Result
  • Start Here
    • All
    • Guides
    • How-Tos
    • Analysis

    PropertyGuru: Malaysian Residential Property Market Continues To Face Challenges As Supply And Demand Declines

    Fed Turns The Tide In War On Inflation, But It’s Too Early To Declare Victory

    The Smart Investor’s Guide to Insurance

    Highlights: Malaysia’s Revised Budget 2023

    4 Reasons Why You Need To Invest In ETF

    SPY vs SPUS: A 2023 Comparison of S&P 500 ETFs

    It's time to embed ESG into your investment portfolio. | Credit: nattanan23 via Pixabay

    The Smart Investor’s Guide to ESG

    (L-R) Kenny Yee, Head of Research and Thong Pak Leng, Vice President of Equity Research

    Post 2023 Budget And Q4 Market Outlook Commentary By Rakuten Trade

    Image by dashu83 on Freepik

    Why This Economic Cycle Is Different?

    • Guides
    • How-Tos
    • Analysis
  • Investments
    • All
    • Asset Management
    • Stocks
    • Islamic Finance
    • Alternatives Investments

    Malaysia’s dance with FAANG Giants

    AIIMAN menjalin pakatan strategik dengan Bank Islam sebagai Rakan Pengedar Untuk Luaskan Capaian Kepada Produk Kekayaan Syariah

    E-mail Popup Warning Window Concept

    ICMR Research Series: Safeguarding Malaysian Investors Against Financial Scams

    How Is The Malaysian Property Industry Doing Post-Covid?

    What Can We Learn From The “Equity Risk Premium” About The Prospects For Equities Vs Bonds

    SC-Bursa: Measures To Boost Capital Market Vibrancy And Competitiveness

    Still Worth Investing In Sustainability In 2023?

    ICMR Research Series: Unexpected Life Situations And Industry Issues Drive Vulnerability For Malaysian Investors

    Bursa Malaysia Expands “Approved Securities” Criteria To Boost Market Vibrancy

    • Asset Management
    • Stocks
    • Islamic Finance
    • Alternatives Investments
  • Personal Finance
    • All
    • Cash Management
    • Grow Your Wealth
    • Protect Your Wealth
    • Distribute Your Wealth
    • Behavioural Finance

    Property Tussle: Being Left Homeless After Sister’s Death

    Employment Opportunity Fraud Syndicate: Lidt Cooperation Advertising Sdn Bhd Or Lidl Cooperation Advertising Sdn Bhd

    What You Need To Know About The Insurance Industry In Malaysia

    5 Rules For Malaysians To Improve Their Financial Wellbeing

    Tears In Heaven: Who Protects Your Insurance Money?

    Patterns And Types Of Cybercrime In Malaysia From 2016 To 2021: Part 2

    Patterns And Types Of Cybercrime In Malaysia From 2016 To 2021: Part 1

    ICMR Research Series: Millennials And Gen Z Must Plan Early For A Better Retirement In A Changing World Of Work

    The State Of Malaysia’s Education And Financial Literacy Among The Youths

    • Cash Management
    • Grow Your Wealth
    • Protect Your Wealth
    • Distribute Your Wealth
    • Behavioural Finance
  • Enterprise
    • All
    • Startups
    • Entrepreneurs
    • SMEs
    • Leadership
    • Business Planning
    From left Eizzar Supiar, AVP - Evaluation, Cradle_ Adlin Yusman, Co-Founder of BeMalas_ Suthenesh Sugumaran, Co-Founder of BeMalas_ and Joyce Wee, Former Executive Director of Etalage

    Cradle Circle: Bridging Visionary Startups and Investors in Second Series Event

    Gorgeous Geeks Marks 15 Years of Empowering Women in Technology

    MDDA Celebrates 30 Years of Industry Excellence

    DNA Mapping, A Revolutionary Medical Breakthrough

    Thomson Ushers In New Treatment for Spinal Muscular Atrophy

    Authority Institute’s Maverick Foo named Vistage Malaysia’s Speaker of the Year

    Digital Niaga Empowers Local Businesses With Digital Access To Financial Solutions for Micro, Small Medium Enterprises’ (MSMEs)

    Bizsu: On A Mission To Cool Down The World And Save The Environment

    Management team of Web Bytes Sdn Bhd (from L-R) at the Launch of Xilnex Retail Tech Experience Center: Ng Tiong Kuan, COO; Lee Ming Kew, CFO; Ooi Boon Sheng, CEO; Eng Aik Kian,  CTO (far right); Tan Wei Kit, Business Development Director (2nd from right) with Lee Kah Hin Jerry, Chief Investment Officer of GD Express Bhd (4th from right) and Ken Phua, Deputy President of MRCA (3rd from right)

    Web Bytes Unveils Wonders Cafe As The Hub For Xilnex Retail Tech Experience Center

    • Startups
    • Entrepreneurs
    • SMEs
    • Leadership
    • Business Planning
    • Fintech
  • Property
    • All
    • Startups
    • Entrepreneurs
    • SMEs
    • Leadership
    • Business Planning
    From left Eizzar Supiar, AVP - Evaluation, Cradle_ Adlin Yusman, Co-Founder of BeMalas_ Suthenesh Sugumaran, Co-Founder of BeMalas_ and Joyce Wee, Former Executive Director of Etalage

    Cradle Circle: Bridging Visionary Startups and Investors in Second Series Event

    Gorgeous Geeks Marks 15 Years of Empowering Women in Technology

    MDDA Celebrates 30 Years of Industry Excellence

    DNA Mapping, A Revolutionary Medical Breakthrough

    Thomson Ushers In New Treatment for Spinal Muscular Atrophy

    Authority Institute’s Maverick Foo named Vistage Malaysia’s Speaker of the Year

    Digital Niaga Empowers Local Businesses With Digital Access To Financial Solutions for Micro, Small Medium Enterprises’ (MSMEs)

    Bizsu: On A Mission To Cool Down The World And Save The Environment

    Management team of Web Bytes Sdn Bhd (from L-R) at the Launch of Xilnex Retail Tech Experience Center: Ng Tiong Kuan, COO; Lee Ming Kew, CFO; Ooi Boon Sheng, CEO; Eng Aik Kian,  CTO (far right); Tan Wei Kit, Business Development Director (2nd from right) with Lee Kah Hin Jerry, Chief Investment Officer of GD Express Bhd (4th from right) and Ken Phua, Deputy President of MRCA (3rd from right)

    Web Bytes Unveils Wonders Cafe As The Hub For Xilnex Retail Tech Experience Center

    • First Time Home Buyers
    • Central
    • Northern
    • Southern
    • Sabah & Sarawak
    • Regional / Global
    • Feature
  • ESG
  • Lifestyle
  • News & Events
  • Bahasa Melayu
No Result
View All Result
Smart Investor Malaysia
No Result
View All Result
Advertise with Smart Investor Advertise with Smart Investor Advertise with Smart Investor
Home Investments

4 Tips To Invest For Long Term

1 year ago
in Investments
0
0
SHARES
0
VIEWS
Share on FacebookShare on Twitter
Subscribe to Smart Investor E-Magazine Subscribe to Smart Investor E-Magazine Subscribe to Smart Investor E-Magazine

Countless investment articles have continually espoused the benefits of having a long-term view. Forget about the short-term setbacks and keep your eyes on the prize. It is just a bump in the road. Stay invested and you will reap the rewards in the end.

But in reality, adopting a long-term view might be more difficult to practice. It can be a long journey riddled with sudden surges of volatility capable of wiping out massive gains in a portfolio.

Telling someone to be patient and ride through the volatility is the common refrain used in the industry to tell investors to stay invested and not part with their funds. But how convincing is it sometimes?

Here are a few tips on how you can practice long-term effectively in your investments:

1. Accept That It Is Going To Be Bumpy

Having a long investment horizon does not mean you will be spared from the volatility that is bound to happen in any market.  An investor with a 20-year investment horizon who started investing in the year 2000 would have to endure the dotcom bubble, September 11 terrorist attacks, the 2008-GFC, taper tantrum in 2013, and now the Covid-19 pandemic.

In fact, the longer your investment horizon, the more economic recessions, bear markets, geopolitical flares and market memes you have to endure. Saying that you have a long-term view does not automatically give you a free pass and allow you to bypass these short-term swings. Your portfolio will react in tandem and you might have to put up with losses for periods of time. This sounds painfully obvious, but few investors appreciate this fact.

Many still react immediately and make drastic shifts in their allocation because the sight of red just makes them nauseous. That is when you start making those impulsive decisions and kicking yourself later.

Learning to live with volatility requires a mental adjustment and some getting used to. But accepting it is the first step.  

2. Diversification Is No Fun, But It Works

The future is inherently unpredictable and no one has perfect foresight of everything including how an industry or a company will evolve in the future. So how do fund managers do it then and invest with conviction?

The answer probably lies somewhere in between. There are no absolute yes’ or no’s in the investment realm where the tide can turn at any time. Decisions are made by fund managers by determining what is probable and what is not based on information available.

That is also the reason why the holdings of a fund are diversified across different companies or sectors to avoid any overreliance on a single stock to drive returns.

In an age of instant gratification, where expectations for returns have only gotten higher and quicker, diversification almost seems passé today. Making concentrated bets in eye-watering meme stocks or cryptocurrencies with promises of double-digit returns is now considered à la mode.

But to succeed in investing is not about making no mistakes at all. Not even Warren Buffet can lay claim to that. Rather, it is about making sure you get more rights than wrongs in your investment journey.

The fact that we do make mistakes in investing is why it is critical for our portfolio to be diversified. That way, losses can be offset by gains in your portfolio to ensure that you still have skin in the game.

Setting aside some ‘play money’ to chase the next stock or crypto darling is unlikely to do much harm. But the real danger is when investors gamble their entire savings away and lose all their capital with no chance of ever returning.

3. Holding Power Is Crucial

The ability to think long-term can only happen when we feel secure about our present state. An investor with low savings and piling debts cannot be expected to stay ‘optimistic’ about the future and ignore the losses in his portfolio when his survival is on the line. Who bothers about the future, when they are worried about the now?

There were many lessons that Covid-19 taught us about managing money, but the most valuable one is undoubtedly the importance of keeping an emergency fund.

The future is becoming inherently more unpredictable. The only way to tide things over is to keep an ample margin of safety through cash reserves and liquid instruments such as money market funds.

To be fair, it is hard to know how each of us will react when a market meltdown happens. It is usually preceded by really scary events like a terrorist attack or this current pandemic. But if you are experiencing real anxiety, perhaps it is an indication that you might be taking too much risk or you actually do not have the financial endurance that you thought you had before.

This brings us to the final tip…

4. Revisit, Review And Rebalance

Change is constant throughout history and market cycles. But many of us underestimate the capacity for change in ourselves too. Major life events such as a new addition to the family, marriage or a career switch can affect our capacity for risk and investment objectives.

For example, an investor who is now nearing retirement might have to tweak the portfolio’s allocation towards more conservative asset classes like fixed income or balanced funds. On the other hand, an investor who has just become a parent may want to be positioned more heavily in equities for long-term capital growth opportunities.

While investors should commit and stick to their long-term plan, it is important that they also periodically review their portfolio to see whether it is still geared effectively to accommodate any new changes in their life. An investment plan should not necessarily be seen as being carved in stone; it is meant to be organic and fluid just as life is.

Lastly, throughout the year, an investor should also consider whether the asset allocation (for example, in equities and fixed income) has drifted away from the initial parameters because of market movements. In hot markets, the equity portion in a portfolio might climb higher than other asset classes.

Rebalancing is then necessary to ensure that the portfolio is reset back to its target allocation to ensure that it is compatible with the investor’s risk appetite. Otherwise, the investor might be taking more risk than originally intended which might be detrimental to his long-term goals.

Hold On And Sit Tight

Long-term investing is not so difficult when you focus on yourself and ignore the goings-on of markets. Some patience is needed, but what is also essential is the ability to endure and be willing to put in the time to compound returns.

As legendary American stock trader Jesse Livermore said, “It never was my thinking that made the big money for me, it always was sitting.”

About the Author

Lee Sheung Un is a Communications Officer at Affin Hwang Asset Management. A millennial, he is still finding that balance between wealth, freedom and purpose. Views expressed are his own.

Previous Post

Here’s Why You Need To Plan For Your Retirement

Next Post

Covering All Bases for SMEs With SME Insurance

Next Post

Covering All Bases for SMEs With SME Insurance

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

ESG Evolve 2023 ESG Evolve 2023 ESG Evolve 2023
  • Trending
  • Comments
  • Latest
From left Eizzar Supiar, AVP - Evaluation, Cradle_ Adlin Yusman, Co-Founder of BeMalas_ Suthenesh Sugumaran, Co-Founder of BeMalas_ and Joyce Wee, Former Executive Director of Etalage

Cradle and Bursa Malaysia Collaborate to Facilitate Listing of Local Startups in Bursa Malaysia

11/09/2023

Robo Advisor In Malaysia, 8 Robo Advisor Platforms To Choose From

17/08/2022
drawbacks unit trusts investment

5 Drawbacks Of Unit Trusts Investment That You Should Know Before Investing

19/09/2023
A calculator on financial chart, financial concept

Tax For The 6 Common Investments In Malaysia

19/09/2023

Digital Fundraising Platforms in Malaysia

Retirement Plans for the Self-Employed

SC Guidelines On Digital Assets

Retirement planning advise from the experts

Retirement Planning: Best Practices and Advice From Experts

Datuk Ir. Dr. Dennis Ganendra Achieves Coveted RAE International Fellowship for Exceptional Engineering Contributions

21/09/2023

Worldwide Holdings Berhad Leading the Green Revolution

21/09/2023

Malaysia’s dance with FAANG Giants

21/09/2023

ESG Evolution: COP27 to Carbon Stocks Insights

20/09/2023

Datuk Ir. Dr. Dennis Ganendra Achieves Coveted RAE International Fellowship for Exceptional Engineering Contributions

2 days ago

Worldwide Holdings Berhad Leading the Green Revolution

2 days ago

Malaysia’s dance with FAANG Giants

2 days ago

ESG Evolution: COP27 to Carbon Stocks Insights

3 days ago
Smart Investor Malaysia

© 2023 Smart Investor Malaysia | The contents on this website are for educational purposes only. You should always seek your own professional advice from the appropriate financial advisor or institution.

Category

  • About
  • Subscribe
  • Write For Us
  • Payment Policy
  • Shipping Policy
  • Cancellation and Refund Policy
  • Privacy Policy
  • Contact Us

Sign up to read our newsletter

  • Start Here
  • Investments
  • Personal Finance
  • Enterprise
  • Property
  • ESG
  • Lifestyle
  • News & Events
  • Bahasa Melayu

© 2023 Smart Investor Malaysia | The contents on this website are for educational purposes only. You should always seek your own professional advice from the appropriate financial advisor or institution.

No Result
View All Result
  • Start Here
    • Guides
    • How-Tos
    • Analysis
  • Investments
    • Asset Management
    • Stocks
    • Islamic Finance
    • Alternatives Investments
  • Personal Finance
    • Cash Management
    • Grow Your Wealth
    • Protect Your Wealth
    • Distribute Your Wealth
    • Behavioural Finance
  • Enterprise
    • Startups
    • Entrepreneurs
    • SMEs
    • Leadership
    • Business Planning
    • Fintech
  • Property
    • First Time Home Buyers
    • Central
    • Northern
    • Southern
    • Sabah & Sarawak
    • Regional / Global
    • Feature
  • ESG
  • Lifestyle
  • News & Events
  • Bahasa Melayu

© 2023 Smart Investor Malaysia | The contents on this website are for educational purposes only. You should always seek your own professional advice from the appropriate financial advisor or institution.