Investing is for the long term
You can jump high and low if you want: but investing is a long-term game. All financial markets fluctuate, and that's a fact. If you're going to get the best returns, panic isn't an option: always stick to your long-term vision. Why, you ask? Well: that's what we're about to explain.
Getting started with investing
In a previous article, we gave you nine tips on starting with investing. One of these nine tips was to invest for the long term. Investing comes with ups and downs, and especially markets such as cryptocurrency tend to fluctuate intensely. Just look at the vast drops during the Corona crisis!
The reason behind the ‘long-term investing’ approach is that the shorter the time frame in which you invest, the less time for the market to recover. Some markets can take months to recover from a dip, and if you panicked and sold your assets, you might just miss out on the subsequent upcoming increase!
Why should you invest for the long term?
Past results show an economic law: well-chosen and diversified investments always show a better return in the long run than, for example, a savings account. The savings interest rate is currently at a whopping 0%, but even when the interest was higher, the economic law of investments still managed to rise above.
But how do you invest for the long term? Easy. Just follow these steps!
Step 1: Determine your investment horizon.
Why do you want to invest, and when do you want to access your invested funds and returns? This period is called the investment horizon. Are you saving for a trip around the world in two years, or would you like to buy a new car in the coming 12 months? Or are you investing to save for your pension, perhaps? The broader the timeframe of your investment horizon, the more possibilities the market has to recover in case of a drop!
Step 2: Determine which risks suit you.
Do you lie awake at night when the market’s in a dip? Then you might not be built for high-risk investments. What risk level suits you is for you to decide. But, to help you out, we’ve graded all our bots with a risk level varying from 1 (low risk) to 12 (high risk). This level of risk is determined by the past performance of that particular strategy for a specific market.
Connect your risk level to your investment horizon. The shorter your investment horizon, the less risk you’re able to take. Do you invest with a long horizon? Then you may be able to take a little more risk. With the aforementioned economic law in mind, of course!
Step 3: Practice investing.
We understand you might not be ready to pop all your money into your investment account and start trading. It’s always good to practise before you start. You don’t drop a child in the ocean without first having had some swimming lessons either, do you? To help you get started, you can begin by following a particular bot in the BOTS app before actually investing a dime! Are you ready to get started? Start with a low deposit: an amount you can afford to lose. Some practise funds, as it were! This gives you a chance to get used to the fluctuation in the market (and discover whether you’re a high-risk or low-risk investor!).
Step 4: Spread your investments.
Investing always involves risks. There is no such thing as risk-free investing. But there are ways to reduce the risk: starting with spreading your investments. So instead of picking one bot and dropping all your funds onto him, you can spread your funds over several bots. If one bot lets you down, the others will do their best to pick up the slack!
Step 5: Deposit funds periodically.
It can be beneficial to top up your investment funds monthly with money you have to spare. When you invest every month (you can do so with as little as €50), your total investment will grow, and with it, your returns will too.
And again: don’t drive yourself crazy if the market starts to fluctuate. Always keep the economic law in mind!
Step 6: Let BOTS do the work for you.
The last step is the easiest. If you’ve completed all the above steps, it’s time to sit back and relax. The bots in the BOTS app do the work for you. Now, don’t go checking the app every hour, as it’ll drive you absolutely bonkers. Bots work based on the algorithms they’re designed with. They take certain risks based on their knowledge, programming, artificial intelligence and machine learning. Just let them do their job and see how they perform in the long run. Still not happy with a particular bot? You can kick him off your winner-team within seconds!
BOTS is a tech company that has developed an app that makes it possible for anyone to start investing. You only need €50 to get started. BOTS uses automated trading strategies based on algorithms. We call these algorithms bots. These bots are tiny superheroes: they make automated investing accessible to everyone. With their help, you can invest in cryptocurrency within minutes — without any knowledge! And we’ll do you one better… In 2021, you’ll also be able to invest in stocks and other currencies through the BOTS app.
The app is free to download and quick and easy to install. BOTS currently operates in more than 15 countries, and by the end of the year, BOTS wants to be active in at least 60 countries and four continents.
Need any help with anything?
Even though automated investing is incredibly easy, you might need some time to find your way around the app and discover all the options. So if you still have questions wandering around your mind, or you just can’t seem to figure it out, please do not hesitate to contact the BOTS support department.
Don’t feel like calling our support team? Just head to the BOTS YouTube channel and browse through the dozens of instructional videos that may help you further. You are also royally invited to the BOTS Discord channel.
Ready to get started?
There is no such thing as risk-free trading. It is possible to lose (part of) your stake.