In general, long-term investing is described as a strategy of buying and holding onto investments for a period spanning 10 years. Read on to learn more.
What is a long-term investment?
A long-term investment is ideal for investors with a time horizon of 10 or more years. This is mainly because these types of investors often tend to be willing to accept more risk in exchange for the potential to gain higher returns over time.
Benefits of long-term investment
Some key benefits of this type of investment include savings on time and cost, tax advantages, compound interest and risk/ return benefits, which help smooth out the kinks of short-term volatility.
Types of long-term investments
The main types of long-term investments are mutual funds, ETFs, stocks and bonds along with real estate. Real estate investments include land, commercial property and residential property. Real estate in Sri Lanka the likes of John Keells Properties offers some great options for long-term investments.
Long-term investments strategies
As a general rule of thumb, when it comes to long-term investment strategies usually incorporates a buy-and-hold approach. It also may include other related strategies such as value investing, growth and passive or active investing.
It’s important to remember that long-term investing primarily focuses on investors achieving favourable rates of return over the holding period with no notice of short-term fluctuations.