June 2, 2020

Investing for the long term

You invest for the long term. All financial markets fluctuate. That's a fact. And in order to achieve the best return, it is important not to panic immediately in the event of a fall, but to hold on to that long-term vision. We will explain exactly how this works today, in 6 clear steps.

BOTS by RevenYOU | Long-term investments
BOTS by RevenYOU | Long-term investments

Start investing

Earlier we wrote an article with 9 tips to get off to a flying start when investing for the first time. In this article we also advised you to start investing for the long term. Investing goes with ups and downs. All financial markets fluctuate. So also the cryptomarkets. The falling prices when Corona just came around the corner, reflect this well.

The shorter the time you invest, the less time there is for a market to recover. So if you have to deal with a falling price, give it time and don't immediately panic.

Why invest in the long term?

Past results show an economic legitimacy: well-chosen and diversified investments always show a better long-term return than, for example, a savings account. Savings interest rates are now close to 0%, but this lawfulness has existed for much longer. Even when ordinary savings interest was paid out on a savings account.

To do this in the best possible way, there are a number of steps you can take before you start investing.

Step one: Determine your investment horizon.

What is the reason you want to invest? Per when do you want to have access to your deposited money and your return? We call this period the investment horizon. The further away this horizon is, the more room the market has to recover, should the price fall in between. So decide for yourself for which period (approximately) you are going to invest.

Step 2: Determine which risk suits you.

Not everyone is suitable for dealing with high risks. If you lie awake when the market value drops by 10%, you can take this into account in your investments. Just the same the other way around. If you don't lie awake, then you may dare to take more risk. To help you on your way, we give all our bots a level of risk. This varies from 1 (low risk) to 12 (high risk). This risk level is determined by past results of that specific strategy in a certain market.

Link this to your investment horizon. The shorter the period you want to invest, the less risk you can take. Are you investing with a long horizon? Then perhaps you can take a little more risk. Of course, with the aforementioned economic laws in mind.

Step 3: Practice with investing.

With BOTS you can first follow a certain bot (strategy) before you actually commit. Good, because then you already have a little feeling before you start. Start with a low deposit, an amount you can miss. Practice money as it were. Invest it in a bot that you have followed for a while, and which you think suits you well. This way you get used to the fluctuation in the market. They're always there.

Step 4: Spread your investments.

Investing always involves risks. There is no such thing as risk-free investment. Unfortunately. To reduce the risk, you can choose to spread the amount you invest. With us, you don't choose one bot to trade for you, but maybe 2. Or 4. Or even more. Just what suits you best. By investing with multiple bots, you spread all your risk. Because the market fluctuates, you will see this reflected in the bots that trade for you. This works in exactly the same way as with shares. Some of them perform less well than average, but on the other hand, there are always stocks that perform above average.

Step 5: Periodically deposit money.

If we assume the same lawfulness as from the previous steps, then it is convenient to deposit money every month. Do this with money you have left. By depositing money every month (and this can be done from as little as €50,-), your deposit will grow and with it your return in the long run. Also for these periodic deposits, of course, you let the bots do the work and don't make yourself crazy when the market starts to fluctuate. Always keep the economic legality in mind.

Step 6: Let BOTS do the work for you.

The last step is immediately the easiest. Don't do anything after all the above steps. The bots in the BOTS app do the work for you. It can sometimes seem as if a bot is continuously descending and ascending. The bot does this because it is taking a certain risk, based on its knowledge and programming. That knowledge is not wrong, by the way. Bots act for you on the basis of machine learning, artificial intelligence and algorithms. We can't make them any smarter. Well, it's easy for you.

Investing is for everyone

Everyone should be able to invest. And now they can. With BOTS by RevenYOU. Together we are going to make the world of investment fairer and more transparent. Are you interested, but your question hasn't been answered yet? Then take a look at the FAQs on our site. Or contact us, we will be happy to explain it to you in person.

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Download the BOTS app on your mobile phone today! For Android click here, for Apple click here.

There is no such thing as risk-free trading. It is possible to lose (part of) your stake.