10 Long-Term Investing Strategies That Work Part 1

Bring balance into your financial plan.

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A quote attributed to Titus Maccius Plautus, a Roman comic playwright, has unexpected relevance for investors: "In everything the middle course is best: All things in excess bring trouble to men." Balance serves as the ideal metaphor for long-term investing. Needs change over time and shortcut stratagems that may work one year can prove obsolete – and even costly – the next. We asked experts to weigh in on some of the soundest investing strategies to use throughout your life.

1. Invest in what you understand.

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Ignorance is never bliss whenbetting on a particular sector or company over time. Otherwise, you may as well play the slots in Las Vegas. “If you don’t understand the business you invest in, you’re going to be highly unlikely to discern the noise from truly meaningful information that should factor into your decision-making,” says Thomas Sudyka Jr., president of Lawson Kroeker Investment Management in Omaha, Nebrask

2. Start investing as early as possible.

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The longer money is invested, the more potential it has to grow.
“Investors who start early, practice patience and stick to a long-term investing strategy often see the best returns and financial success,” says Colton Dillion of the Acorns online investment site. Someone who contributes $1,000 into an IRA from ages 20 to 30, and then stops, has an edge over someone who starts at 30 and invests $1,000 annually for 35 years. Assuming a 7 percent annualized return, the first person will have $168,515 at age 65, and the second will have $147,914.

3. Put a 401(k) match into your mix.

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It’s hard to believe people turn down free money that grows with time. But three in 10 workers with access to an employer match in their 401(k) fail to participate, according to the U.S. Bureau of Labor Statistics. “If your employer has a matching contribution inside of your company’s plan, make sure you always contribute at least enough to receive it,” says Kevin Meehan, regional president for Chicago with Wealth Enhancement Group. “You are essentially leaving money on the table if you don’t take advantage of the matching contribution."

4. Set up and stick with sound cash-flow management.

“There’s no other element of investment planning or portfolio management that’s more essential over the long term,” says Jesse Mackey, chief investment officer of 4Thought Financial Group in Syosset, New York. The key is simple yet crucial. Automatically invest money during your working years – each month at the very least. “Simply adhering to the cash-flow plan, while making reassessments as life progresses and needs change, will put an investor 90 percent of the way toward achieving their goals,” Mackey says.

5. Separate emotions from objectives.

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If you treat an investment possibility with the same partisanship as a sports team fan (or hater), you’re setting yourself up for trouble. “Separating your emotional involvement with a security from the purpose of its ownership will lead to better overall judgment and performance,” says Kenneth Hoffman, managing director and partner at HighTower’s HSW Advisors in New York City. “The more open-minded you are to thinking about investments in a new light, the more likely you are to invest in something undervalued."

Part 2 tomorrow

http://money.usnews.com/money/personal-finance/mutual-funds/slideshows/10-long-term-investing-strategies-that-work