Trading on the stock market can be more than stressful. With daily fluctuations, geopolitical conflict, pandemics, shifting industries, and many other factors it becomes harder to stay focused. For day-traders, this might not matter that much: they can thrive on these daily fluctuations. Staying ahead of the market, continuously analyzing and predicting future trends. However, for the average trader, these fluctuations only make it harder to stay on course. How to make sure you can continue to execute a long-term strategy?
Track stocks passively
It can be tempting to continue to watch the market and read financial news. On the other hand, if your investment horizon is twenty years, why bother that much? Naturally, this also depends on the diversification of your portfolio. If you have diversified your assets, it is not needed to track your stocks daily. It makes sense to check in once in a while, and do not act upon the fluctuations, and stay on course. A stocks tracker can help you to achieve this.
What is a stock tracker?
A stock tracker allows you to monitor various exchanges where your holdings are trading and combine all of this into a single dashboard. Besides all your holdings you could have an overview of your trades and therefore get portfolio analytics. One of the other advantages is getting push notifications on significant price changes. You can configure this to only receive a notification when big market shifts happen. This allows you the freedom to not think about your portfolio, only in moments it matters. Do be careful, as sentimental market changes can make you do irrational trades.
Diversifying your portfolio
Diversification is key when it comes to trading for the long term. You cannot bet on a single industry (e.g., oil with its high dividends) and expect to have strong returns over a longer period. To make sure that you diversify well, spread your investments in broad index funds as a foundation. This enables you to cover most of the market with relative ease.
Dollar-cost averaging and monthly deposits
The market changes continuously. This makes it important to continue to invest in stocks and index funds over time. A strategy that facilitates this is dollar-cost averaging (DCA). It simply means that you invest the same amount periodically, and the purchasing price becomes the average across all these data points. This is generally a safe way to invest, while you continue to work on your long-term goals.
Think about your goals
Why are you investing in the first place? For example, are you working towards a FIRE number or an amount you need to purchase something you want to have in a longer period? Set this goal and see how you can build towards it with monthly deposits
Tracking your progress with a stocks tracker is a good way to facilitate this process. One of the leaders in the field is Delta.app, which developed an application that combines both stocks with crypto assets. You can visit their website to learn more about the functionalities that are offered.