Investments are of two kinds; long-term and short-term. Both of them have their own advantages and disadvantages. While some investors find long-term investments suitable for their end goal, others opt for short-term investments.
A rule of thumb regarding investments is that the longer the time for which you invest the money, the less effort you have to put into it. This means that long-term investments tend to freeze your money for a substantial period but give you great returns.
If you have decided to make a long-term investment with high returns, make sure to put aside a rainy day fund. Which is money reserved to cover the expenses if an emergency comes up and you need cash immediately.
As a first-time investor, you may be confused as you pick the right investment option for a long-term investment. That’s why we suggest you keep reading this article to learn more about how you can make your first venture yet play it safe.
This is undoubtedly the most reliable form of investment. Bond funds are also known as mutual funds, while others call them bond ETFs. As, most often than not, a government entity is involved in them, they are considered less risky than other options.
There are many types of bonds, and we can categorize them based on their maturity period, the risk levels involved, and the entity that issues them. When the entity issues the bond to the investor, it promises to pay them some interest annually. Once the bond has matured, the issuing party also pays off the principal debt.
If you are looking for the safest investment possible, you should opt for bond funds. They let you save your money for an extended period and help expand your portfolio.
Mostly associated with tech companies, growth stocks are becoming an increasingly preferred choice amongst people who look for long-term investment options. The two reasons why investors love them are their massive returns and their promise of high growth in a short period.
What sets them apart from others is that all the profit earned by these stocks is put back into the business, doubling its growth. This happens mainly because these investments don’t offer regular dividend payments.
Hence, if you opt for growth stocks, you may have to let go of the option of having regular dividends. Nonetheless, these stocks also require you to have a high-risk tolerance. If you are daring enough, you should invest in them, and, in the long run, they may turn out to be highly lucrative.
Traditional yet lucrative real estate tends to make people millionaires! However, they should have the patience and tolerance to wait for the right time before they make their moves.
This is an investment that might require you to pay some amount regularly. Apart from the down payment, you may have to pay for the renovations and regular maintenance. This is why you should have the patience to pay for them in order to gain greater profits later on.
If you hold the property for a long time, you will be able to sell it later on at a greater price. However, you need to choose the right kinds of properties, and have a good eye on the market to make the correct decisions timely!
Not fond of managing your own portfolio? Not a problem. You can still make long-term investments by investing in target-date funds. These are automatic funds that make the required shifts whenever needed.
These funds tend to shift your investment from a very aggressive stock to a little conservative one. They do so mainly when you reach your retirement age. This is because, at this age, you should risk less and make sure you enjoy your retirement.
This is an excellent option for those who invest specifically in their post-retirement life. If you, too, want a secure and comfortable post-retirement life, you should invest in target-date funds. All you need to do is inform the portfolio manager of your retirement date, and the rest will be handled backstage!
Ready To Make A Long-Term Investment?
Long-term investment yields great results. When you have your money put aside in an investment plan, and you know it is working for you, you will surely sleep soundly at night. However, while making these investments, make sure to diversify your portfolio rather than relying entirely on a single source of investment!