Why the amount of time is as important as the amount of money in investment?

Why the amount of time is as important as the amount of money in investment?

Money must work- this is one of the main law of personal well-being. It often seems that rational investing is difficult for non-professionals, but it’s not.

One of the important factors in the rationality of investment strategies is the investment period. Making a long-term investment in the stock market can create some concern, especially if you are a beginner. Yet, in some cases, investments with a long time horizon turn out to be more advantageous than short-term ones.

If you consider that you have sums of money that you shouldn’t need in the short term, you should know that the long-term investment has greater earning potential than the short-term one. For the operation to be successful, however, it is necessary to know well the mechanisms of the stock market and to be able to predict its developments.

Also, keep in mind that the gains on the stock market are unlikely to arrive in a short time. Usually, it is smart investments held over months and years that lead to a steady return.

If what you want is to set aside the capital and obtain interesting returns with a contained risk, the long-term investment – more than a few years – is just what is right for you.

It would be impossible to attempt to explain the philosophy behind Warren Buffett’s investments in a few words. However, one of the key points is investing in the long term, so Buffett does not open speculative investments, but only in companies in which he believes and which are able to produce results in the long term.

Unless a company you invested in has undergone a radical change in outlook, holding the stock for a long time will prevent an investor from acting too humanly, too emotionally. Being too fearful or too greedy can lead investors to sell stocks when prices are low in panic selling or buy when they are high because the entire market is euphoric.

Time horizon management: the difference between a speculator and an investor

The speculator, in short, sells and buys out of fear. The aware investor instead, acts with discipline, constancy, and, indeed, patience. Time is not a problem or a negligible element for him, on the contrary, it plays a predominant strategic role, which if managed well allows you to obtain higher returns.

It is extremely important to invest your savings correctly but it is also equally important to make investments for a longer period of time to make the best use of your money and time with the magic of compounding.

It often happens that people think that investing a large amount once gives good profits and of course it does. But investing for long term offers different opportunities and better returns as compared to the previous option. Start investing today with the experienced team of RKFS and make your money work for you.

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