The stock market had a rough year in 2022 and early trends in 2023 are signaling another turbulent year ahead. However, as always, there will be light at the end of the tunnel. Many central banks have spent the last year increasing interest rates to try and curb inflation and it looks like these tactics are working. In the US, inflation is slowly dwindling, and many countries are expected to follow suit.
When looking at investments within the last year, it’s easy to focus on losses. Many portfolios took a big hit in 2022, but if those same investors scoped out to a 5-year or 10-year view, they might see a more positive picture.
Long-term investing is always a great approach, but it can be helpful to lean on it even more during times of volatility in the market. What feels like a major hurdle now, will probably seem a bit less intense 5 years from now.
As long as your investment strategies are centered around long-term investments that are likely to recover and bounce back within the next few years, your portfolio won’t suffer in the long run. Of course, every investor has a unique investment approach and individual financial goals but keeping the big picture in mind helps everyone stay grounded no matter what the market is doing.
Timing the market rarely ever works but understanding and maintaining an effective long-term strategy often does. If you are not sure where to start when it comes to investing, work with a trusted professional.
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