Why you should Invest for Long Term?
What Is Long-Term Investing ?
Long-term investing from the word itself is a kind of investment when a person decides to set aside his money for long term goals. Long term investing is riskier than short term but when it comes to return on investment (ROI) long term investment is substantially higher.
Here are some of the benefits you can get when you decide a long term investment:
VOLATILITY AND TIME
Long term investments like 10 years or more tend to show lower volatility than those short term investments for less than 5 years period. The longer you held your investment, the bigger the chance you will absorb any loss you incur if the market is significantly low .The time is one of the factors that really affects your total earnings.
Frequently, long-term gains (those held more than a year) are subject to tax at rates below your income tax bracket while short term gains are subject to regular income tax.
Long term investing is more likely for biggest life goals, education of your children, early retirement and other personal goals.
BEST LONG TERM INVESTMENTS
The best investment above all is yourself. Nurture yourself, , improve your talents and skills and be the best person you can be. The only person who know yourself best is you, know how you can maximize your individuality and make use of it in order to get better and better as time goes by. Be financial literate, you must know how to manage your wealth as it grow. There are now a lot of resources available so don't stop learning.
Mutual Funds and UITFs (Unit Investment Trust Funds )
Another great long-term investment is investing some of your saved money on mutual funds or UITFs. Mutual funds and UITFs are perfect for those people that have no or little time to manage their investments but still want to receive good returns. One of the biggest advantage of mutual funds is that there are fund managers that will take care of your money and knowledgeable enough to decide if when is the perfect time to gain profit and avoid incurring loss.You dont need to study financial statements and other factors that affecting the stocks of a certain company. There are several products under mutual funds where you can choose according to your investment personality if you're conservative or aggressive investor.
Investing in stock market is still the best option for long term investment as it offers more gains compares to other investments. Knowing the reason that you will accumulate more gain on stock market in connection to it is the fact that it is the one of the most riskiest way of investing and need time to learn how it totally works and making the most out of it. There are different strategies stock investors uses in-order to maximize their gains and minimize losses like diversification, GARP investing strategy, market timing, buy and hold, growth investing strategy and value investing strategy. The younger you start investing the better as you have ample time to learn the market and experience as your best teacher.