The Motley Fool

How to invest for your long-term future

If you’re anything like me, you like to invest for the long-term.

I’m a buy and hold investor and love to find good-quality ASX dividend shares that provide income and growth opportunities.

Whether you’re into CSL Ltd (ASX: CSL) or Telstra Corporation Ltd (ASX: TLS), there are many ways to put your hard-earned cash to work.

If you’re struggling with where to start, or how to improve on your investment strategy in 2020, here’s a few things to keep in mind this year.

Think about long-term investing trends

I think the new decade is the perfect time to consider what will drive investment returns in the next ten years.

With the recent bushfires devastating the country, climate change is top of mind for many Australians.

It could be that investing in coal miners like Whitehaven Coal Ltd (ASX: WHC) could provide limited upside in the near future. While I’m not sure myself, the world’s largest asset manager just announced it will divest its coal assets, and I’m taking notice.

That could mean investing in companies influenced by electric vehicles like Pilbara Minerals Ltd (ASX: PLS) or Syrah Resources Ltd (ASX: SYR).

Similarly, water security is shaping up as a key issue which could mean buying Duxton Water Ltd (ASX: D2O) shares.

Whatever you choose to invest in, keeping a long-term perspective is always important.

Build a diversified ASX portfolio

You might think that Afterpay Ltd (ASX: APT) shares will soar in the next decade. Even so, it may not be wise to invest 100% of your earnings in one or two companies.

A diversified ASX portfolio is the key to building long-term wealth. By diversifying across the global economy, you can reduce your risk and boost your long-term returns.

That could mean a mix of growth stocks, big dividend names like National Australia Bank Ltd (ASX: NAB) or even global fund managers such as Magellan Financial Group (ASX: MFG).

Don’t be your own worst enemy

One of the easiest investment mistakes is to let your mind get in your way. Once you’ve got a solid, diversified portfolio, I prefer to just leave it be.

Often investors lose money by panic buying or selling at the wrong time. Barring any major catastrophe, I like to just trust my judgement and let the portfolio do its work.

This helps me to invest in my long-term future without doubting my investments in the short-term.

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Kenneth Hall owns shares of Syrah Resources Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO and CSL Ltd. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of National Australia Bank Limited. The Motley Fool Australia has recommended DUXTON FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.