Becoming a millionaire has never been easy. However, there are three steps you can take to make it a lot easier.
Think long term
The first is to think long term. Many investors try to buy low and sell what does cialis commercial mean high. This is a sound strategy in theory and if youre able to execute it consistently over a long period then it will work out well. However, the reality is that predicting short-term price movements of any share is incredibly challenging. Thats why it makes sense for investors to think long term and focus on the compounding of returns rather than seeking to trade their way to millionaire status.
In fact, the FTSE 100 has returned over 9% per annum since its inception in 1984. This is a stunning return and shows that even if youre only able to match the total return of the index, doing so over a long period can turn even a modest amount of cash into a sizeable nest egg.
Buy the best
All investors are tempted by cheap stocks. Likewise, theyre all tempted by companies thatoffer high potential growth rates. The reality, though, is that both types of company come with high risk. For cheap stocks, theyre often cheap for a reason. Their profitability may be about to come under pressure or their financial standing may be dubious, for example. Growth stocks sometimes deliver on their potential, but are often let canada meds online pharmacy down by rich valuations or inconsistent results.
Due to this, it makes sense to invest in order cialis online reviews stocks thatoffer a broader appeal. In other words, invest in stocks with a mix of a sound balance sheet, strong cash flow, a competitive advantage over rivals and a valuation thats fair rather than dirt canada pharmacy colchicine cheap.
By investing in the best quality companies, an investors risk/reward ratio is likely to be maximised. And while they may cost more than the cheapest stocks around or be forecast to grow at a slower pace than a small tech stock, in the long run the best quality stocks are likely to offer the best overall returns and improve your chances of becoming a millionaire.
Diversify
While all investors would like to think that theyre the next Warren Buffett, the reality is that we all make mistakes. Certainly, its possible for anyone to beat the market on a consistent basis as Buffett has done. However, any company can have a profit warning at any time and its therefore imperative that diversification is a central theme of all portfolios.
Thats because it reduces company-specific risk. This means that if a stock in a diversified portfolio halves, it will have a smaller impact on the overall portfolio and wont put an investor back to square https://genericcialis-2getrx.com/ one on thejourney towards becoming a millionaire. Diversification also means that its possible to invest in a wide range of sectors and geographies, thereby allowing you to access growth rates and value opportunities thatwouldnt have been possible through holding only a cialis generic small number of stocks.
Becoming a millionaire
Of course, finding stocks that are worth adding to your portfolio is a tough task, which is why the analysts at The Motley Fool have written a free and without obligation guide called 10 Steps To Making A Million In The Market.
It’s a simple and straightforward guide that could make a real difference to your portfolio returns. As such, 2016 could prove to be an even better year than
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