Yesterday, we discussed how high-risk investments like stocks become surprisingly safe if you have a long investment horizon. 

Since the stock market always goes up in the long run, those who can simply wait out the inevitable downturns will be justly rewarded. 

Today, we’ll go into a little more detail on such low-risk, high-return investments. 

The infinite investment horizon

If you invest in stocks, you should be sure you will not desperately need that money for many years to come. In fact, the best philosophy is to have an infinite investment horizon. 

This means that you run your personal finances in such a way that you’ll never need to sell your shares. 

Just leave them to grow until the awesome power of exponential growth one day shows you what true freedom looks like. 

Automated and diversified

The best way to put this into action is to set up relatively small and fully automated monthly investments in several funds offered by a range of reputable firms.

As discussed on Monday, this is very easy to set up in our modern banking system. 

Another cool thing is that you can invest with a purpose by choosing funds specializing in economic sectors or regions you really believe in. 

If you choose some well established, diversified funds and ensure that you won’t need the cash you invested for many years to come, there’s very little that can go wrong.

Indeed, with an infinite investment horizon, you can only win or win big. 

To put any last doubts to bed, those who are highly conservative like me could put 10% of their investments in physical gold and silver (e.g. goldmoney.com). This will cover the highly unlikely financial doomsday scenario where all of us simultaneously lose confidence in fiat currencies and hyperinflation takes over. 

Never try to time the market

As a final piece of advice, never try active stock trading unless you’re a professional.

Financial markets are extremely unpredictable and human emotions tend to encourage exactly the wrong investment decisions. 

Rather just set it and forget it. As your portfolio grows, it’s nice to check in every once in a while. And when a big drop comes every decade or so, just stay calm and do nothing 🙂