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8 Best Long-Term Investment Strategies

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Published
07/30/2024

Long-term investing strategies focus on choosing assets that grow steadily. Investing over the long term requires a sense of balance. There are no shortcuts, no high-risk moves. Evaluate each potential investment to secure your financial future until retirement. It involves less trading and more investing in assets you know will grow over time, then cashing them out at the right moment.

Long-term investing starts early. The more time you give them, the more they will grow. Don't wait until you have more money. Don't be afraid to invest, even if it's dollars. Every dollar adds up. Compound growth is real and will work in your favour, even if you invest ten dollars at a time. If you start in your mid-20s, by your mid-60s, you could generate thousands of dollars in returns.

Here are some long-term investment ideas from experts.

Research Growth Stocks with Long-Term Potential

Growth stocks promise high growth. They are often tech companies, but they can come from any sector. They typically do not pay dividends but have strong quarterly profits.

Buying individual growth stocks requires research and analysis skills. They are high-risk stocks and can lose value quickly, like during a recession. This is why you want to hold these stocks for 3-5 years.

Invest in Stocks, ETFs & Index Funds

Stock funds are collections of stocks, such as mutual funds, Exchange-Traded Funds, or ETFs. A specific business category usually unifies them or has a theme. If you need more time to research individual stocks, find a fund that has demonstrated strong returns in recent years.

As you will own stock in more companies than if you purchased a single individual stock, while not all of them will excel in a given year, you should have stable returns overall.

Diversify the Types of Companies You Invest In

Do not stick entirely to one industry or one type of stock, whether individual stocks or stock funds. For example, if you purchase a fund based on oil and gas, your portfolio might suffer when oil prices rise.

If you diversify, however, if one sector tumbles, you're still held up by the other assets you've invested in. This is how you balance out volatility. This is also how index funds work, such as an S&P 500 index fund.

Investing in Mortgages

Look for ways to diversify and add to your portfolio by investing in alternative assets, such as mortgages. You can invest in mortgages privately through a Mortgage Investment Corporation or MIC and reap the banks' returns.

Select how much you want to invest and the length of your term and withdraw your money at the end of the term. Depending on the variables involved, MIC investments can yield anywhere from 6% to 16%.

Invest Directly in Real Estate

While mortgage investing involves investing in mortgages, you can also invest directly in real estate and receive high returns over time. Direct real estate investment is upside-down because you own the property.

This means you must cover property taxes, maintenance, updates, and renovations. It's not a passive investment. Having a real estate investment portfolio can bring stress, take up your time, and cost you money to keep it profitable every month.

Invest in Bonds

Governments or companies issue bonds. The issuer agrees to pay the bond owner an amount of interest annually, and at the end of an agreed-upon term, the issuer repays the principal. Bonds are an excellent investment for investors who want to avoid analyzing and buying individual stocks.

Although they fluctuate and move based on interest rates, they are relatively stable, especially government-issued bonds, which are the gold standard in this asset category.

Buy When Assets Experience a Dip and Hold

If you can afford to invest and wait, when values dip in a stock you know has long-term growth attached, that is when you buy. This happened a lot during the COVID pandemic. The stock market had a hiccup, and many investors invested at record-low prices.

Many stocks have bounced back and made millions. Just be sure to judge your risk tolerance and time horizon appropriately.

Automate Your Investment Portfolio

With the help of financial advisors and growing AI technology, you can automate your investment plan and become a millionaire without any hands-on effort. Dedicate a part of every paycheque to your investment account and let an expert manage those investments.

Many firms offer access to advisors who can help you direct your money toward stocks, bonds, and other long-term return options.

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