Intro: Top 10 Best Long-Term Investments & Long-Term Investing Strategies
To be successful in long term investments, you normally need to be prepared to invest in stable and long-term growth investments.
You also need to be patient enough to sit back and watch your money grow, and have the self-discipline to continually contribute to your long term investment.
Long-term investing strategies are becoming increasingly popular, and for good reason. No matter which long-term investment strategy you choose, the best long-term investments will all share similar characteristics:
- Require less management than their short term counterparts
- Provide long-term growth
- Are low risk
- Have a history of long-term performance
If you look for these characteristics in any potential long-term investment, you’ll know you’re looking at something that at least deserves consideration as one of the best long-term investments.
For those who are interested in adding new investment strategies to their financial plan, we have createda detailed list of the top 10 best long-term investments to get you started.
See Also:Tips on Investing in Bonds | Bonds Investment Guide
Best Long-Term Investments | Index Funds
Index funds remain one of the best long-term investmentsbecause they’re an inherently strong and diversified product.
An index fund holds a wide range of companies, so your money is never tied to the successes or failures of any one given company.
In fact,Warren Buffet, the legendary investor, recommends S&P 500 index funds asthe best long-term investments.
Using S&P 500 index funds in a long term investment strategyputs your money behind proven companies with a history of success.
Overall, the long term growth of the stock market makes S&P 500 index funds intoa very good bet for long term growth and long-term investments.
Long-Term Investments
Best Long-Term Investments | Bonds
Bonds are an excellent long term investment option because they tend to be much less volatile than stocks on average.
Bonds with a 10 year or higher maturity date are also likely to provide a better yield than those set to come due earlier.
If you can afford to set your money aside and have the patience to watch it grow, bonds are some of the best long-term investments.
There are also certain types of bond products which are guaranteed. This not only provides you with a good long term investment, but also greatly reduces your risk factor.
For those reasons, bonds will always be one of the best long-term investments you can buy, and a key component of a diversified long term portfolio.
Best Long-Term Investments | Blue Chip Stocks
Although buying individual stocks is often not one of the mostsound long term investment strategies, there may certainly be something to gain by investing in individual blue-chip stocksfor large-net worth investors.
These stocks are a part of large, billion-dollar valuation companies, and are likely to show steady and consistent growth over time.
Over time, the stock market has continued to grow, and long term investment gains are the norm.
These types of shares in particular are among the most stable long term investments, and provide dividends for income or reinvestment.
Best Long-Term Investments | Investment Properties
Investing in property–such as residential real estate, commercial real estate, or land–has long been considered one of the best long-term investments available to the private investor.
This is not a hard and fast fact, however. Investing in property can certainly be a valuable long-term investment, but you need to understand the market and keep an eye on things in order to ensure that you stay in the black.
Crashes in real estate–like what happened in Michigan when the automotive industry fell apart–can drop the bottom out of real estate’s short-term and long-term investment value, leavingthe unwary investor in a bad situation.
Don’t Miss:Mutual Fund Investing and Investments
Best Long-Term Investments | DRIPs
DRIPstands for “dividend reinvestment plan,”and DRIPs are some of the best long-term investments to consider.
The reason these arerated among the top 10 best long-term investments is because they are designed to grow your wealth and your investment in a given company with very little input from the investor.
Instead of paying you in cash every dividend period, the amountowed to you from the company is reinvested back into its own shares.
This continues until such a point as you decide to sell, or to opt out of the DRIP and start receiving your dividend funds directly.
The hands-off nature of DRIPs makes them one of the mostappealing long-term investment strategies for many new and seasoned investors.
Best Long-Term Investments | Mutual Funds
A mutual fund is a collection of financial instruments put together into a single fund by a manager. Mutual funds have long been favored as one of the best long-term investments.
A mutual fund that is governed by a manager with a proven track record of success is likely to perform well over the long term. Again, one of the keys here is diversification.
By investing in a mutual fund, you are diversifying your money by spreading it out amongst your various long term investments, and then you are diversified within the fund itself because it holds a wide variety of products.
This provides you with the protection and possibility of growth that marks a good long term investment.
Related:Overview of the Various Types of Mutual Funds
Best Long-Term Investments | Gold
Gold is favored by many as a long term investment, partly because it has been used a measure of wealth for almost as long as humans have been bothering to measure it.
Gold tends to appreciate slowly over time, making it a poor bet for the short-term investor, and a wise one for investors who arein it for the long haul.
Although most advisors recommend only putting a small portion of your portfolio in gold, it is still one of the best long-term investments.
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Best Long-Term Investments | Art
If you’re a high net-worth investor looking to make some long-term investments that will increase your net worth while also allowing you to enjoy some of the fruits of your labor, then art can be one of the best long-term investments available to you.
If you buy the right pieces with the advice of an art specialist, it can be a lucrative long term investment.
The additional benefit to investing in art is that, unlike stocks and bonds, you can also enjoy your long-term investmentby displaying it in your home or business.
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Best Long-Term Investments | Collections
Once you’ve diversified your wealth across a wide variety of financial instruments and products, there are other hard assets which provide many people with a long-term return on investment.
There are many different types of physical collections that investors have put money into and enjoyed excellent long-term investment growth. Classic cars is one such market, and wine is another.
As with any long term investment strategy, it is always prudent to speak with an expert on the particular type of investment that you’re seeking to make.
If you have a passion for a field where collecting can become a valuable long-terminvestment, it is worth exploring as an option.
Best Long-Term Investments | 401K
Investing in your 401kis one of the best long-term investments because it is aimed squarely at retirement.
The truth is that everyone will livelong enough will reach an age where they are either unable to work, or not wanting to work as much as they once did.
By investing in your 401kearly and letting it grow as a long-term investment, you set yourself up for that retirement while enjoying some good tax benefits along the way.
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Conclusion: The Best Long-Term Investments & Long-Term Investment Strategies
All of the best long-term investments have several things in common, and they require certain things of investors who want to watch their wealth grow over the long term.
No matter what type of long term investment you choose, any type of long-term investment willrequire patience.
You need to be willing to wait 10 years and more and be making regular contributions to long-term investments to really see the benefits pay off.
A long term investment will also require stability. People who have knee-jerk reactions and like to buy or sell in a panic will not be able to enjoy the benefits that long term investing strategies provide.
Long-term investments alsorequire monitoring. While you never want to make a knee-jerk reaction, you also don’t want to invest your hard-earned money and forget about it.
When considering long-term investments, make sure that you consult with your financial advisors. This helps to ensure that your money is always working for you, no matter which of these 10 long term investments you happen to be utilizing.
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As an expert in financial investments with a deep understanding of various long-term investment strategies, I can provide valuable insights into the concepts mentioned in the article.
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Index Funds:
- Index funds are an excellent long-term investment due to their inherent strength and diversification. The article correctly notes that they hold a wide range of companies, reducing the risk tied to individual companies' successes or failures.
- The endorsem*nt of S&P 500 index funds by Warren Buffet adds credibility, as he is a legendary investor with a proven track record.
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Bonds:
- The article highlights bonds as a low-volatility long-term investment option, particularly those with a maturity date of 10 years or more. This is accurate, as longer-term bonds generally offer better yields.
- The mention of guaranteed bond products emphasizes their appeal as a low-risk component in a diversified long-term portfolio.
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Blue Chip Stocks:
- While cautioning against individual stock investments, the article acknowledges the potential gains in blue-chip stocks, which are shares of large, stable companies with billion-dollar valuations.
- Blue-chip stocks are recognized for their steady and consistent growth over time, making them attractive for long-term investors.
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Investment Properties:
- The article rightly notes that investing in real estate, whether residential, commercial, or land, can be one of the best long-term investments. However, it emphasizes the need for market understanding to mitigate risks during economic downturns.
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DRIPs (Dividend Reinvestment Plans):
- The explanation of DRIPs as a "hands-off" long-term investment strategy is accurate. DRIPs allow investors to reinvest dividends automatically, promoting wealth and investment growth with minimal effort.
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Mutual Funds:
- The article correctly emphasizes the importance of diversification through mutual funds. A well-managed mutual fund, overseen by a successful manager, can provide a balanced and diversified long-term investment.
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Gold:
- Gold is portrayed accurately as a long-term investment that tends to appreciate slowly over time. The advice to allocate only a small portion of the portfolio to gold aligns with common investment principles.
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Art:
- The article identifies art as a long-term investment option for high-net-worth individuals. The suggestion to seek advice from an art specialist reflects the need for expertise in this unique investment category.
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Collections:
- The mention of physical collections, such as classic cars and wine, as long-term investments aligns with the idea of diversifying wealth across various assets. It emphasizes the need to consult experts in specific investment types.
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401k:
- The article rightly positions a 401k as one of the best long-term investments, particularly for retirement planning. The emphasis on early investment and leveraging tax benefits is sound advice.
In conclusion, the article effectively outlines various long-term investment options and strategies, highlighting the common characteristics that make them successful. The importance of patience, stability, and monitoring in long-term investing is appropriately stressed, and consulting with financial advisors is encouraged for informed decision-making.
