When you want to create an investment portfolio, there are many factors that influence the decision and one of them is the term. You can make short or long-term investments depending on your investor profile. This will define your way of investing money.
In this long-term investment guide, we will try to detail the different products to which you can choose to invest in the long term as well as a series of tips to invest in certain modalities in an efficient manner.
Where to invest in the long term?
The long-term investment is generally considered to be that which takes place over a period of more than one year, although some consider it in a period greater than 2 or 3 years if it considers the existence of the medium term.
Some of the long-term investment options are the following:
Long-term investment in the Stock Market
Generally, the notion that you have about investing in the Exchange is linked to investment in the medium or short term, but really, in order to take advantage of the investment in it as it should be, the good option is to invest in the long term. It is true that in order to manage investments in it, it is necessary to acquire certain knowledge about the title in which it is intended to invest. All this is due to the exposure of the same to the market and the hundreds of volatile factors that will generate oscillations in their value.
As a general rule, the rule that governs investments in the stock market is the traditional premise that says: “to greater profitability, greater risk” and vice versa.
Long-term investments in the Stock Exchange have the main reason and that is to increase the value of the securities through dividends or interest, or by benefiting from the upward rise in market value, that is, the real use of the Stock market is based on investing in potential companies when the value of their securities falls and thus boost profitability and minimize the risk of loss.
Currently, the average return is 3.5% with an assumed risk that is strengthened in the short-medium term. The long-term investment in the stock market avoids and reduces the risk since the variations with the passage of time are higher.
It is necessary to say that this vision depends on the perception of each investor since this is in general terms.
Long-term investment in deposits
Deposits are one of the most contracted financial assets. They are offered by banking entities. The reason for investing in them was mainly the security they granted thanks to the Deposit Guarantee Fund.
The panorama of these has been changing with the different monetary policy decisions regarding the interest rates that govern the eurozone. The ECB, the main governing body, has, according to the economic outlook, modified the interest rate environment, lowering it and causing banks to also reduce the profitability of the financial assets offered by them. Therefore, deposits are no longer the star product for savers.
Long-term investment in pension funds
Pension plans are long-term investment financial products whose purpose is a posteriori saving, mainly aimed at the retirement of workers. The idea is that the investor makes periodic contributions to have a higher income in the future.
The advantage compared to the Exchange is that it is not exposed to market volatilities but there is a clear disadvantage and that is in these types of investments or plans, it is the rescue. To recover the money provided in this long-term plan, you are subject to high interest rates. If you want to know more about payday loans, click Payday Loan Helpers.
Long-term investment in crowdlending
Crowdlending is one of the modalities that is going strong among investors. This is the investment that finances companies since it is invested directly in loans granted to those companies that meet the requirements that each platform has established.
These new alternatives have a considerable acceptance with the operations that yield average returns of around 6 %. In fact, MytripleA presents an average return on this type of assets of around 6.5% in what has been operating. Therefore, risky investors or those more moderate that incorporate some medium risk asset in their portfolio incorporate this type of transaction.
To welcome the most conservative investor who seeks the security of their savings, MytripleA is the only crowdlending platform that offers investments guaranteed by Reciprocal Guarantee Societies or SGR that in turn have the reaval of CERSA and later of the FEI. This product has the security that the most conservative wish to have in their investments.
Long-term investment advice
There are many experts in long-term investment who advise, explain experiences … So, if your real intention is to get the most out of your portfolio, have a detailed knowledge of the product on which you will embark to invest as well as having read experiences and evolutions about it, will help you to know more about the environment in which you are going to begin to introduce.
Warren Buffet is an American expert considered one of the best investors in the world, on long investment exposes a series of tips full of metaphors such as:
- “Regardless of talent or effort, there are things that take time: you can not produce a baby in a month leaving seven women pregnant”
- “Always invest in the long term: someone sits today in the shade of a tree that he planted a long time ago”
- “Time is the best friend of the wonderful businesses and enemy of the mediocre”
We recommend you apply these 4 more general tips and always keep them in mind:
Common sense when investing in the long-term
Common sense plays a very important role in investment decisions. It depends on the option or the financial asset on which you decide to invest, always use your head. If the investment does not prosper, do not insist on something that may possibly be lost, especially in the stock market.
In the other options, if you see that the investment does not finally convince you do not reiterate in the product.
Use the money you demarcate, no more
Separate a part of your money and invest it and reinvest it. Use and reuse profits but do not blind yourself to appearances, especially in those investments in which the assumption of risk is high.
Study the different options for long-term investment
According to your investor traits, study the different options that are presented to you for long-term investment. You will achieve in this way a higher effectiveness of the operation.
In this sense, it is advisable that when you create a portfolio with several financial products, you diversify too, in this way, diversify the risk.
Guarantee guarantees: security in long-term investments
Ask yourself and inquire about what guarantees or guarantees the investments have. Compare that security and the profitability they show with the level of risk and make a comparison of the products that generate doubts.
- The investment guaranteed by SGR in Crowdlending of MytripleA yields a return of around 2% + Euribor and presents a surety of 100% coverage of capital plus ordinary interest.
- The deposit is another product that has 100% coverage of the investment by the FGD has an average return that does not reach 1% in the best case.
These two products are related under certain conditions and, on the other hand, the following two also:
- The Stock Exchange presents a return in what we have of the year 2018 of 3.5% with a quite high assumption of risk depending on the term to which you invest. No one guarantees or endorses the operations.
- The investment that equates to the Exchange is the investment in crowdlending in highly profitable operations (around 6.5%) and measured risk since, as the operation is financed through a platform in which the funding of the loans with the money of the different investors, have a risk assessment carried out by the experts behind them. In addition, operations can count on personal guarantees …