Best Long-term Investments

In finance, when we talk of long-term investments, they include all such investments which are made for a minimum period of five years. Long term investments, compared to short-term investments, involve far lesser risk. The return on investment may or may not be the same as on short-term investments. Looking at the current turbulence in financial markets, many investors are changing their strategies to fit in some long-term investments, to be on the safer side. So, if you are wondering which are the best long-term investments today and how to go about them, here are some useful tips on the same for you.

Tips on Making Long-term Investments

Research
Before taking long-term investment decisions, it is important that you conduct a thorough research of the market. If you search the Internet, you will find numerous websites which will help you to understand the current market situation very well. So, go through these sites to get a better knowledge of the companies/mutual funds/bonds which have been profitable in the long run.

Invest in Real Estate
Real estate can still be counted amongst the best investments, provided a person invests in it wisely. As the latest trends have been showing, the value of single family houses is going down but that of apartments is going up. The rent of apartments too is on the rise signaling that the value of apartments is going to appreciate in the future. If you are planning on taking a loan for real estate investments, this is the right time as apartment loans are available at very low-interest rates these days. Moreover, the price of the property too has fallen down considerably, which means that you can buy it cheap today and sell it at a huge profit, once the market picks up!

Real estate analysts have come up with a list of cities which are considered the top ten long-term investments in real estate in the coming decade. Their criteria for choosing these places is employment opportunities, hike in rents and low home prices in the respective cities. So, you can consider investing in any of the cities listed below.

• Dallas-Fort Worth-Arlington,TX
• Houston, TX
• Tulsa, OK
• San Antonio, TX
• Salt Lake City, UT
• Phoenix, AZ
• Indianapolis-Carmel, IN
• Denver-Aurora, CO
• Oklahoma City, OK
• Charlotte-Gastonia-Concord, NC-SC

Buy Stocks
The best long-term stock investments are those which are made in the high dividend paying companies. So, invest in some of the oil and gas companies such as Royal Dutch Shell or BP, banks such as Barclays, big pharmaceutical companies such as Pfizer, Johnson & Johnson, supermarkets such as Walmart, Tesco and telecom companies such as AT & T, Vodafone. All these big companies offer the right kind of stability in today's turbulent stock market and hence are good options for a long-term investment. In short, choose your stocks carefully, before putting money in them. And, once you invest in stocks, make sure to monitor them on a regular basis. Retaining the stocks which outperform in the market and selling off those which underperform, that too at an appropriate time, is the key to making profits in the stock market, in the long run. One very effective tip here is to sell the stocks which are underperforming, when the market is high and buy new stocks, when the share prices are down!

Diversify
A good long-term investment strategy is to diversify your portfolio and invest in a variety of stocks, mutual funds, hedge funds, bonds and other financial instruments. If possible, invest in a number of geographic areas such as USA, Asia, Europe and all other emerging markets. To reduce the risk, make sure that any of the investments that you have made is not more than 10% of your total investments. Also, invest in a number of sectors so that if any sector collapses, you can make for the losses by profits from other sectors.

Invest in Treasury Bonds
Investing in US treasury bonds is one of the best investment strategy as these are issued by the government and hence are very safe. The maturity period of these bonds is more than seven years and can go up to thirty years. If you are looking for cheap long-term investments, treasury bonds are your answer as they can be taken for as little as $1000 to as much as $ 1 million. The yields can be anywhere between 5% to 7.5%, depending upon whether you bought them first or second-hand.

Put Money in Deposits
One of the safe investments are fixed deposits of the banks and the post office, recurring deposits and investing in government schemes. Although, returns will be lower, still the investment will be safe.

Buy Gold and Silver
This is the right time to invest in precious metals like gold and silver, as these investments are comparatively safer and secure, than the other ones, especially in this time of recession. If you look at the prices of gold and silver in the last decade, they have not been much affected by the fall in the stock market. You can either buy gold and silver in physical form or purchase ETF's i.e., exchange trade funds.

Reinvest
For a long-term investment success, it is important that a person reinvest his earnings from dividends and all other sources. Even if the earnings from reinvested capital are small, in a long-term it can amount to a lot of money. Also, a person should review long-term investments in stocks from time to time and if they are making continuous losses, they should be sold for making investments in better performing stocks.

This was in short about the best investments in today's scenario. In the end, it can be said that the key to long term financial success lies in thoroughly researching the market before making investments and in diversifying your portfolio as much as you can.