Taking Control of Your Future Finances: 5 Long Term Investment Strategies That Work

Taking Control of Your Future Finances: 5 Long Term Investment Strategies That Work

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According to 2020 statistics, more than half of all Americans have a stake of some kind in the stock market.

As well as that, there are other ways to invest than just buying stocks. You can buy bonds and other securities, or you can choose to take charge of your investments actively.

If you’re after long-term investment strategies that will keep your wealth safe and grow it considerably at the same time, there are a few different options you should consider.

Read on as we take a closer look at the five most important long-term investment strategies.

1. Stocks

Stocks are perhaps the best-known investment vehicle. When you buy a stock, you’re essentially buying a share in a company. The better that company performs, the more it will be worth, and the more money your investment will make.

If you’re making a long-term investment in stocks, you need to be careful. Company values can go down as well as up, giving stocks the potential to knock a lot off the value of your investment.

2. Bonds

Bonds are debt instruments that governments and corporations issue to raise finance. They repay bondholders in regular installments over long periods, sometimes decades.

These are great securities for long-term investors, as they are very low-risk. Government bonds, in particular, are practically guaranteed to make their repayments.

The disadvantage of bonds is that their rate of return is typically very low. Bonds are good for saving money, but they won’t make you rich.

3. ETFs & Mutual Funds

If you’re wondering whether to invest in stocks because of their risk profile, these funds can provide a useful alternative.

Exchange-traded funds (ETFs) and mutual funds provide a way of investing in a large basket of securities all at once. Mutual funds are usually actively managed, which means that managers pick up and drop stocks over time. ETFs are passively managed, usually tracking the performance of an index like the S&P 500.

4. Commodities

Commodities are raw materials that are, by their nature, valuable. They include gold, silver, and crude oil.

These materials tend to hold their value very well over time. They can also provide insulation from the ebb and flow of the economy, as their price movements don’t always correspond to those of the market.

5. Active Investment

If you have time on your hands, you could manage your investments actively. One popular way to do this is by investing in a property and renting it out or flipping it for a profit.

The Best Long-Term Investment Strategies for Your Money

Long-term investment strategies are different from those that are only intended to last a few months or a year. When you take on a long-term strategy, you’re trying to build wealth for retirement or your children going to college. That means you have to play it a little safer than other investors.

With one of the strategies outlined above (or a mix of more than one), you should be well on your way to growing your pool of wealth.

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