Getting comfortable with long-term investing

Time can be one of the most powerful tools an investor has. Yet it’s often overlooked. Many people believe successful investing is about spotting the perfect moment to buy or sell. In reality, it’s usually less about timing the market and more about time in the market.

Long-term investing focuses on helping you reach your goals – whether that’s retirement, buying a home or building financial security. Short-term investing, by contrast, is largely about trying to second-guess daily market movements. That’s difficult, even for professionals.

Taking a long-term approach brings some clear benefits: the potential for compounding growth, the chance to build consistent habits, and simpler, calmer decision-making.

Time is on your side

One of the most powerful forces in investing is compounding – where your returns start generating returns of their own over time. In simple terms, you earn returns not just on the money you invest, but also on the returns that money has already made. Given enough time, this can have a meaningful impact.

The longer you stay invested, the less pressure you may feel to react to daily headlines or short-term market dips. Markets naturally move up and down. Over short periods, those movements can feel uncomfortable. Over longer periods, they tend to smooth out.

More time also gives your investments a better chance to recover from temporary setbacks. Market declines are a normal part of investing, but historically, markets have recovered and grown over time.

This longer-term mindset also fits naturally with many life goals. Saving for retirement, building a deposit for a house, or investing for your children’s future all take time. Investing with a similar horizon can make sense.

Consistency supports results

Long-term investing isn’t just about waiting. It’s also about building habits.

Investing regularly (for example, monthly) helps create a steady routine. This approach means you invest through both good times and bad, which potentially smooths out the impact of market ups and downs.

You don’t need large lump sums to get started, either. Even small, regular contributions can build into something meaningful over many years. In fact, consistency can be just as important as choosing the ‘right’ investment.

Reducing emotional decision-making

When markets are volatile, it’s natural to feel uneasy. Sharp falls can trigger fear. Strong rises can create excitement and a fear of missing out. Both emotions can tempt you to act quickly.

The risk is that reacting in the heat of the moment can lock in losses or lead to decisions you later regret.

A clear, long-term plan can anchor you. It provides a framework for decision-making, rather than leaving you at the mercy of headlines. It also helps to understand that market corrections – periods when markets fall by around 10% or more – are a normal part of the journey. They’re uncomfortable, but not unusual.

Having realistic expectations about how markets behave can make it easier to stay the course.

Long-term investing tips

• Set clear goals and realistic timelines. Know what you’re investing for.

• Contribute regularly where possible, even if the amounts are modest.

• Resist the urge to constantly check your portfolio. Daily movements rarely matter over decades.

• Revisit your risk level when circumstances change. For example, after a major life event or as you approach retirement.

The bottom line

Long-term investing doesn’t just reduce the mental load of researching and trying to time the market. For many everyday investors, it has also proved to be a more effective and comfortable way to build wealth.

You can’t control markets. But you can control how long you stay invested, how regularly you contribute, and how calmly you respond to change. Over time, those simple choices can make a powerful difference.

This is a financial promotion that has been approved for issue to UK Retail Clients, by Towers Watson Investment Management Limited (TWIM), authorised and regulated by the Financial Conduct Authority, (FRN 446740). Please refer to the KID and any other relevant documentation before making any final investment decisions. TWIM is the Alternative Investment Fund Manager (AIFM) for Alliance Witan PLC. TWIM is part of Willis Towers Watson.

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This information is for informational purposes only and should not be considered investment advice. The views expressed are the opinion of TWIM and are not intended as a forecast, a guarantee of future results, investment recommendations or an offer to buy or sell any securities. The views expressed were current as of end February 2025 and are subject to change. 

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