5 tips for long-term equity investments

Looking for equity investment tips and factors to consider? Here are five long-term trading considerations to keep your investments balanced for growth potential for the long run.

People at work trading and watching stocks on their computers.

Investing in long-term equities.

Despite market ups and downs, there are several common strategies that you can use to help weather volatility and keep your investments afloat. The following five tips can help you stay the course:


1. Focus on the long term.

Most experts will tell you that if you are investing for the long run, like for retirement or for a specific financial goal, it’s better to let your money go along for the roller coaster ride. If you try to anticipate the market’s ups and downs, you run the risk of selling before an upturn, and then being on the sidelines when the market rallies. Sometimes, missing even a few days can make a huge financial difference.


2. Know the risk factors.

Even when you stay in the market long term, there may be risk involved with investing your money in equity investments. Knowing your goals and risk tolerance will help you to choose investments that are right for you, so you’ll be comfortable riding out market volatility.

  • There are different types of risk, ranging from capital risk, when you risk losing what you’ve invested, to legislative risk, when changes in tax laws may make certain investments less advantageous.
  • Various types of investment products have different types of risk associated with them. It’s important to keep in mind that higher returns usually carry higher levels of risk.
  • Before investing, it’s a good idea to evaluate the risks, fees, and expenses involved with the products you're considering and determine if they fit your comfort level.
  • It is also important to know that your investment choices are in line with your investment objectives and time horizon.
A woman sitting at a desk looking at a spreadsheet on her computer.

3. Investing diversification. 

“Diversification” means investing in a variety of assets with different risk/return characteristics. You can accomplish this by spreading your investment money across several asset types, or by diversifying within a specific asset category.

  • By investing in various asset classes, you reap the benefits when one or more category is doing well, while limiting the potential for harm when a category performs poorly.
  • If you invest in more volatile assets, such as small capitalization companies, you should also invest in assets that are generally considered to be less volatile historically, such as large-capitalization companies, so the risk profile of your overall investments balance out.
  • Investing in products that are managed by professional money managers may be a good idea, too, because some diversification is often already built in. Depending on the product, money may be invested in a wide range of equity investments. You simply choose a product that is suitable for you and that meets your risk comfort level.


4. Dollar-cost averaging.

Dollar-cost averaging means you systematically invest a fixed amount of money at regular time intervals. The objective of dollar-cost averaging is to reduce the average price you pay for the securities, since you will buy more securities when the price is low and fewer when the price is high.

  • With cost-dollar averaging, you don’t try to time the market. Rather, you invest at regular intervals and hope that by doing so, you’ll even out the effects of market volatility.
  • Dollar-cost averaging does not assure a profit, nor does it protect against loss in declining markets. To be effective, there must be continuous investment, regardless of price fluctuations. Investors should consider their financial ability to continue to make purchases through periods of low price levels.


5. Protect your legacy while you invest.

While investing in the market can be financially rewarding, the importance of protecting yourself and your family against unforeseen events through proper life insurance solutions cannot be overemphasized.

As investment markets rise and fall, life insurance and fixed annuity products can provide enduring protection for a family and a future.


Want to learn more about investment strategies?

A NYLIFE Securities Registered Representative can help determine what’s right for you. 

All investments involve risk including loss of principal. Past performance of the stock market is no guarantee of future results. For informational purposes only. There is no guarantee any strategy will be successful. Diversification does not assure a profit or protect against market loss.

Investments are offered through NYLIFE Securities LLC (member FINRA/SIPC), a Licensed Insurance Agency and a New York Life company.