5 Smart Investing Habits to Build Your Wealth in 2024

As we look ahead to the new year 2024, many of us are thinking about financial goals like saving more, spending smarter, and building our wealth over time. When it comes to investing, establishing solid habits is key for long-term success. Rather than trying to beat the market or get caught up in the latest trends, there are 5 core habits that allow your money to grow in a sustained, low-stress way.

Automate Your Investing Contributions

One of the simplest ways to build wealth is setting up consistent automatic transfers into investment accounts, like 401ks or IRAs. When contributions come straight from your paycheck or bank account on schedule, it removes the temptation of trying to time the market. There’s no chance of forgetting about that money – it gets put right to work for you in the market. Apps like Acorns have made setting up automated investing incredibly simple. This year, put your contributions on autopilot so you can stay disciplined without much thought or effort.

Minimize Fees to Maximize Returns

While fees on retirement accounts or investment platforms seem small, they eat away hard-earned potential gains significantly over years and decades. The difference between a 1% fee mutual fund and a .03% fee index fund equals tens of thousands lost over a lifetime. Do your research to find low-cost, efficient index funds, ETFs or simplified trading platforms. Ask about expense ratios, account fees and trading commissions to keep more money in your pocket rather than paying excessive management fees. Lower cost investments mean higher long-run returns.

Diversify Across Asset Classes

When investing for retirement or other financial goals, having exposure across different categories of assets – aka diversification – is critical for balancing risk and returns. Rather than putting all your eggs in one basket like tech stocks or bonds, distribute money into stocks, fixed income products, real estate, alternatives and cash. Maintain this diversified approach when saving for long time horizons. Revisit your target asset allocation at least annually or when life circumstances change. This cushions your portfolio from market swings so you stay invested for the long haul.

Avoid Emotional Investing Decisions

Jumping on hot stock tips from friends or panic selling every time the market dips are common emotional pitfalls for investors. But giving into fear, greed or hype often locks in losses or leads us to buy high, sell low. Stick to your financial plan for long-term goals ignoring market noise along the way. Methodically rebalance holdings back to target allocations. Tuning out short-term fluctuations prevents impulsive moves we will likely regret. Stay the course to realize the full benefits of long-term compound growth.

Focus on Time in the Market, Not Market Timing

Trying to time daily market swings or jump in and out predicting peaks and valleys rarely works consistently. Those who make their money through short speculation often end up losing it just as quickly. Far more dependable is investing in quality assets with multi-year, even multi-decade holding periods allowing for compound growth. The longer the time horizon you can maintain, the greater risk-reward payoff you reap. Avoid constant tinkering or looking for quick wins. Instead commit to letting your money grow through patient, disciplined long-term investing habits year after year.

Just implementing one new habit per quarter can add up to meaningful wealth creation over time. Consistently sticking to all five habits outlined here positions you for investing success in 2024 and for decades to come. What’s one habit you can start today?