Long Term Investments

To make it all clear we will first have to understand what long term investments are and why they are essential?

Long term investment in general, is an investment instrument that matures over a long period of time i.e. a period of may be 10 years or so. It may be in the form of a bond, a debenture, or preferred stock/preference shares.

Now, what is the need for such long term investments where one has to wait for such a long time for good returns? Well, the answer lies in you. How long can an average man keep working? May be, until around 50 or at most till the age of 60. And after that??? What will you do for an income? Where will you go for money to sustain yourself after retirement?
Do you think that the Medicare and Social Security will look after your problems? If so, consider rethinking it!!!. Studies say that in a couple of years the social security could be bankrupt and the least of its worries will be to take note of your retirement. So hurry!! and start investing while you still have the time. Here are some useful tips and strategies for Long term Investing.

FIND YOUR REQUIREMENTS TO SET YOURSELF A GOAL

It has been said a billion times and now for the billion and one’th time-“ Proper goals must be set in order to make a proper investment”. Find out as to..
• How much returns you need and at what particular time of your life you need them?
• How much you can invest monthly?
• Can you do the investing by yourself or do you need someone’s guide?
Jot them down.

GET INTO THE RIGHT BAG!!

The second most vital thing to do is to choose the right company or firm. The firm you choose must adhere to your investment goals. You must hold the reigns even in their support. Most importantly look for businesses with the following traits:
1. Solid financials
2. Strong competitive position
3. At least 30% undervalued

The idea is to invest in trends that you believe to be true. Real trends that will shape your future life. You can then obviously mix it with trying to find trends that are not really visible yet or possibly trying to find small under covered companies that will grow with this trend. Buying established growth companies - dominant, hugely profitable firms with significant competitive advantages might be beneficial. These businesses grow for years and are unlikely to be displaced by anyone. But they're more likely to show 10% to 25% annual growth than 50% to 100% growth. You're probably not going to get a 10-bagger in a year with one of these companies, but 100% returns are possible.
One can consider investing in balanced funds too as it would help it to take advantage of both equity and debt markets over a cyclical period while for a medium term horizon equity fund with an SIP option is prudent decision.

KEEP YOUR INVESTMENT INTERVALS SHORT AND REGULAR

Try investing small amounts every month instead of bulky amounts. This might be helpful for you to invest on cheaper shares for the same stock pertaining to the dollar rate fluctuation. It would be best to invest around about 15% of your monthly income. But make sure that it does not interrupt your other essential expenses.

TRY TO GET SOME EXTRA MONEY

Efforts must be made to get as much extra money as possible for better investments. Figure out how to cut down your tax returns as close to zero as possible. You can try by claiming some more deductions on your W-4. Make better use of the tax refunds that are provided.

INVEST CLEVERLY

Make wise investments. Make the right choice of funds that are profit consistent. Do not take much of a risk but make sure your money is safe and investments are earning interest. Make frequent reviews of your investment portfolio.

ADVANTAGES OF LONG TERM INVESTMENTS
Even though long term investments do have some cons they are quite negligible when the positives are taken into consideration. This kind of investment gives you a security for your future and ensures that your money is growing to help you when you need it. So go for it!

And yes, it is quite important to note that if you are not very good at deciding where exactly to put your money into or how to find out what’s best for long time investing, better find yourself a trust worthy broker or a person who can be trusted to guide you through the process. Get suggestions from people who have invested before doing anything.