3 Of The Best Long-Term Investments To Make

One of the best ways to protect your financial future is to invest, and the best way to invest is to make long-term investments.

Although it might be tempting to trade in different investments from one day to the next, having a long-term investment and trading approach is a well-versed and practiced strategy which a number of investors can benefit from.

People who take a long-term approach to investments will find that they need a certain level of patience and discipline, as these investments tend to take longer in order to see a return on the initial investment, although the return can often be greater than short-term investments. With that in mind, let’s take a look at 3 of the best long-term investments you can make.

Growth Stocks

In the world of trading and investing, growth stocks are the creme de la creme. They promise high growth and, as well as this, offer high investment returns. Typically, growth stocks are linked with tech companies, but this isn’t always the case. 

If you’re looking to buy growth stocks, then you will want to ensure you have thoroughly analyzed the company you are looking to invest in, which can take some time. 

This is definitely a more considered form of investment and is one that does require research to be done prior.

Because of the volatility surrounding growth stocks, it’s important to be realistic when it comes to your returns. Typically, you can expect to hold the stocks for between 3-5 years. Growth stocks carry some risks as, often, investors will pay a lot for the initial stock in relation to the company’s earnings. 

Should a bear market or recession take hold, then growth stocks can lose value quickly. However, over time, they have been shown to have the best performance.

Real Estate

Real estate has always competed with the stocks and shares market as to be the best long-term investment. This year, that battle shows no signs of slowing or changing and investing in property is still considered to be one of the best long-term investments you can make. 

The benefits of investing in real estate are lengthy and, if you choose the right asset to invest in, then you can expect to get a predictable and steady cash flow, good returns and tax advantages, to name a few.

Real estate investors typically tend to make their money through rental income and any profits that are generated tend to grow in appreciation. 

As well as this, real estate values tend to increase over time and, by making a good investment, you can generate a profit when the time to sell comes. If you do rent, then over time, rental prices increase too, leading to a higher cash flow. 

There are some downsides to property investment, however, but these tend to be relative. Compared to stocks and shares, which can be traded instantly, property purchases take much longer to complete, but this shouldn’t put you off as there are still a multitude of positives.

Exchange Traded Funds (ETFs)

ETFs have quickly become one of the most popular forms of investments to make. Not only do ETFs allow you to invest in a diverse range and portfolio of securities, but, funds which are available will cover potentially hundreds of different asset classes. 

Unlike mutual funds, ETFs tend to be treated just like stocks and can be purchased for the price of a singular share, or even less. Due to this, it’s much easier to diversify your trading portfolio, even with a smaller amount of investment budget.

Some ETFs will specialize in growth stocks, whereas others will look at things like international stocks or value stocks. You can also look at sectors such as healthcare and tech. Then, you just need to choose which asset you are looking to have within your portfolio.

Conclusion

You don’t need to be a financial banker in order to be successful when it comes to investing. You do, however, need to be aware of the different types of long-term investments which are available and which are better suited to your personal requirements.

No matter your investing history, using long-term investment strategies is a great way to grow and expand your finances and create a good-sized investment pot for your future. It’s always recommended to do your research before making an investment decision, as a number of investments may put you at increased risk of falling victim to scams or fraud, particularly if you aren’t an experienced trader or investor. Should this happen, remember there are fraud recovery options available.

Basics About ETFs for Beginners

Exchange Traded Funds (ETF) are not too popular instruments for retail traders and probably if you are new to trading you haven’t heard of them before. 

ETF trading had become popular in the last few years among institutional investors like investment banks, hedge funds, equity funds and even pension funds. 

Since the “big players” from the financial world had been eager to invest in ETFs, let’s see what exactly this assets are, so you can understand them better and decide yourself if it is worth to invest your time and money.

What is an ETF?

To understand an ETF, you should think about a basket with a few different products in it. An ETF is a tradable instrument which tracks the performance of a commodity, index, stock or a group of assets just like an index. 




The ETF market had been on the rise in the last few years and only in the United States, there is an annual trading volume of approximately $ 20 trillion just with ETFs, according to statista.com. That’s more than the annual GDP of the US and proves the high interest there is for this kind of instruments.

Why should someone buy an ETF?

There are several reasons why ETF trading might be good. First of all, it provides diversification. As we’ve mentioned at the beginning, you can buy a basket of assets, not just one. 

By doing this, you have the risk spread across a certain number of assets, not just one. If you buy a stock, for example, and the stock goes down, you are losing money. 

But if you are buying an ETF which tracks a basket of 5 stocks, your risk will be spread and even though one or two will perform poorly if the others have a good performance, the risk will be balanced.

Investing in a fund

It is also imperative to understand that ETFs are created by banks. When you buy an ETF you are basically buying a portion of the fund behind it. 

The fund is the one who invests in the assets contained by that particular ETF. We must also mention that ETFs are regulated instruments. 

Each bank that wants to create them needs to send the proper documentation to the Securities and Exchange Commission for approval. Only if they receive the approval they can move along and create the fund.