5 tips for successful long-term investing

Avoid checking your investment value too often. Reviewing your investments too regularly which may drive you to act emotionally, rather than rationally, which may harm your long-term returns. While it can be difficult at times, your patience could be rewarded.

At Schroders Personal Wealth (SPW), we believe in the power of active management to help you stay on track with your long-term goals. Our advisers recommend a suitable level of risk based on your individual circumstances, and our investment professionals then actively manage your portfolio within that framework. This means we monitor and adjust your investments in response to market conditions, aiming to enhance growth potential or reduce the risk of losses.

As part of active management, a team of skilled investment professionals will closely monitor and adjust portfolios to take advantage of market inefficiencies and opportunities as they arise, targeting asset classes and markets we want to invest in whilst avoiding others.

Long-term investing isn’t just about making a one-off lump sum investment and leaving it untouched. While it’s wise to avoid reacting to short-term market movements, regularly adding small amounts to your portfolio can be a smart way to build wealth over time. 

This is known as 'pound cost averaging', and over longer periods it can help level out the highs and lows of the market. In fact, over time, you could benefit from market volatility by buying more units when prices are low and fewer when prices are high. However, remember that there are risks associated with investing, and you could get back less than you put in.

When looking to invest for the long term it’s worth considering ways to lower your overall risks. One way to do this is by putting your money into different investments, rather than putting all your money in one place. This is what is known as ‘diversification’.

By not putting all your eggs in one basket, investments that perform well in a diversified portfolio will likely balance other investments that may not be performing as well. This could provide a degree of protection against major losses to your money and investments.

The amount of tax you’ll need to pay will depend on how much you’re investing, your income, and what you’re investing your money in. In the UK, there are three key types of tax that can apply to investments. 

Income tax is paid on income, including interest and dividends, which exceeds your personal allowance of £12,570. If your income exceeds £100,000, your personal allowance decreases by £1 for every £2 earned over this threshold (with no personal allowance on taxable income over £125,140). 

In addition to your personal allowance, the dividend allowance allows you to receive up to £500 in dividends tax-free. Dividend income above this dividend allowance is taxed at differing rates depending on your income tax band. 

Capital Gains Tax (CGT) can also apply to the profit you make when you sell certain assets. For the 2025/26 tax year, the CGT allowance is £3,000, with capital gains above this amount being taxable. Considering the timing of asset sales can help you stay within the allowance and minimise your tax liability.

There are ways to reduce the tax you pay on your investments, such as by using an Individual Savings Account (ISA). You can invest up to £20,000 per year tax-free in an ISA, and all income and gains within an ISA are exempt from tax, meaning you get to keep more of your returns. Stocks and Shares ISAs are ideal for long-term growth.

Change is often the only certainty in life, so it’s important to review your financial plan regularly to ensure that your investments are still on track and aligned with your goals.

How often you choose to review your plan depends on your individual circumstances, but once a year is about right for most people. Over time your situation may change. Whether that’s the income you earn, your family dynamic or even the level of risk you’re willing and able to take. All of these changes may impact your investment choices and so a regular review is recommended.

In summary, investing for five years or more may give your money the opportunity to grow and recover from short-term market dips. By staying committed to a long-term strategy, you could build a stronger and more resilient financial future. 

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Any views expressed are our in-house views as at the time of publishing.

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The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors might not get back their initial investment.

There is no guarantee by investing money it will keep level or beat inflation, particularly when inflation is high.

Tax treatment depends on the individual circumstances of each client and may be subject to change in the future.