To know the answer let us first understand the term “long-term”. Actually, there is no proper definition of the word "long-term" in the investment world neither there is any hard and fast rule or theory for long-term investment. The word "long" varies from investors to investors according to their perspective and investment holding capacity. Normally the definition of long-term investors says if one hold investments more than one year is long-term investors whereas an investor sells asset less than a year is short-term investors. How long and how short to hold the investment depends on an individual investors perspective and their holding capacity.
Investors are often making a mistake while taking the position in shares, a wrong entry in the market usually makes losses in the market. A wrong entry in any share usually makes the investor a long-term investor by Chance, not by Choice. Emotion is another culprit to make investor long-term investors by Chance. Whenever there is a wrong entry in any share and the start price falls than people usually get emotionally attached to the stock and they don't put any stop loss. This is the reason when investors after sometime realize that a small loss in a particular scrip has become the mother of all losses. This is how an investor who comes to the market for a short-term perspective become a long-term investor by Chance.
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| long-term investors by Chance or by Choice |
What you need to do to become a long-term investor by Choice-
The actual long-term investor never buys any share without doing the fundamental and technical study. Fundamental study to select the right share/scrip and sit tight, whereas technical study is required to buy the scrip in right time. They don't buy shares or make any long position in hurry or just hearing any tips/recommendations from the analyst, rather they do their own study and sit tight for more than a year. These investors are actual long-term investors by Choice because they know that they have selected the right script, entered in the right price and have to hold tight for more than a year.
Advantages of being long-term investors by Choice-
There are many advantages to being a long-term investor in the market. The main advantages are one can ignore the market volatility, compounding benefit, have to pay lesser tax, drops investment risk etc for more details one can search advantages on the internet.
To conclude my article I would like to say to all investors, study the fundamental and technicals of a particular scrip before investing. Once you are done with the investment keep track of your investments and sit tight as per your definition of the long term it may be one year or more than that.
Long-term investment by Choice will always give you expected return and don't think of becoming a long-term investor by Chance. If you like my article please do share with others
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