Best Long Term Investment Options Available For You

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Investments are usually assets that help to generate income, or there is appreciation in the face value of the asset. The main objective of investing is to make profits. Investments are most commonly purchased at a lower cost and sold at a higher price which gets the investor speculative gains. Investing means putting money to work to start some projects, buy an asset, or earn interest income. According to financial experts, everyone needs to invest a minimum amount. This amount can be invested in any investment tool like equity, mutual funds, bank accounts, and fixed deposits.

Long Term Investments

Investments are the backbone of economic growth, and they give a considerable contribution to the nations GDP. In 1700 BC, the code of Hammurabi provided the legal framework for investments. Investments can be made in the short or long term. Investments have a risk factor, but some investment tools have negligible risk.

Benefits Of Investments

Investments are significant for an individual’s personal growth. Individuals, a group make investments of individuals, companies and government institutions. People often think that investing is saving funds for rainy days, but it is more than that. Investments are a step above saving as they help to achieve many important goals.

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  1. Earn Additional Income

Investments give returns and interest, which can be used as an external source of income. However, it is advised to individuals that they should invest the funds according to their requirements and risk profile. Low-risk investments may give less return, but they are more stable and reliable.

Long Term Investments

2. Reduce The Burden Of Inflation

Inflation increases the cost of living, and inflation has been robing our purchasing power from almost 100 years. It can create substantial financial pressure and burden on an individual. Hence, investments are an excellent option to fight with inflation as with the help of investments; individuals can grow their funds and get high returns in the long term.

3. Long Term Benefits

Investments earn higher returns in the long term because of the power of compounding. Hence, investing experts advise that it is essential to maintain consistency and have patience with investments. Investments can give high returns only if they are supported with patience and consistency for long durations.

Best Long Term Investment Options

  1. Mutual Funds

Long Term Investments

Mutual funds are one of the most preferred investment options, and they give high returns over a long period. They are of two major types: equity mutual funds and debt mutual funds. Equity mutual funds have a huge market as they provide a very high return on investment, and they have excellent market performance. These funds have a very high-risk profile, so we advise investors not to invest in equity mutual funds if they have a low-risk profile. On the other hand, debt mutual funds are the best investment option for investors with low to moderate risk profile as they provide a steady return on investments. These mutual funds have a low-risk profile, and they offer stable returns, so they are as appropriate for generating regular returns.

2. Pension Schemes And Employees Provident Fund

The national pension scheme is an excellent performing long term investment option as this scheme allocates the funds to various sources like equity, bonds and government securities according to the choice of the investor. This fund matures when the investor turns 60, and the investor can withdraw the amount in small sums, or as a lump-sum amount.

Employee’s provident fund is the safest and most reliable long term investment option. EPF has an average interest of 8 % from the past ten years. EPF is very tax-free and dependable. If one maintains the investments for a longer tenure, then with the power of compounding the individuals can earn very high returns.

Long Term Investments

3. Fixed Deposits

Fixed deposits are the safest and most reliable investment option as they have no risk and guaranteed returns. The interest earned on fixed deposits after a specified amount is taxable. People often underestimate the power of fixed deposits as it makes roughly 6 % interest per year. Still, if one keeps these investments for longer tenures, then fixed deposits can earn 60 % interest in 10 years. Hence, it is an excellent investment option for investors who want good returns without any risk.

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4. Equity

Investing in stocks is a perfect option, but it is not favourable for everyone. The stock market is highly volatile, and there is a considerable risk factor. Investing in the stock market requires a lot of research as it is essential to evaluate funds before starting investments. If the investors invest without proper research and evaluation, then the investors can face tremendous losses. If the investors are investing in the appropriate stock, then they can get high returns. Hence, it is critical to invest in the long term and maintain consistency for getting adequate returns.

5. RBI Bonds

These bonds are taxable and have an average tenure of seven years. RBI bonds have an average interest rate of 7 % per annum. One can avail the interest on RBI bonds either as a regular income under the non-cumulative option, or re-invested under the cumulative option. RBI bonds are one of the most secure and reliable investment options that give high returns on long term investments.

Long Term Investments

Conclusion

It is essential to maintain consistency and have patience. Investments take time to grow, and if one maintains them for long terms, then they can earn high returns. There are various types of investments, and choosing the appropriate investment is very important as there are multiple factors that affect the investments. According to the advice of investing experts, it is essential for individuals that they do proper research and invest according to their risk profile. Investments require patience and consistency for long terms, then only they can give the appropriate results. Investors often get impatient and withdraw their investments which could have given better results. The essential quality of an investor is having patience.

Investors should choose the best investment option according to their requirements and funds. Investments will give returns only if one invests after proper research and evaluation of various factors affecting the investments. Hence, long term investments require a lot of research and patience for the desired results.

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