How To Plan Long Term Investments For The Future
Most of us want certain things out life. Some of us get what we want while other keep trying but never succeed. Being financially secure during retirement is of prime importance to most of us. We want to be able to do all things we never had time for in our youth. In order to achieve this, we have to plan long term investments so that when we are ready to retire, there is sufficient money in the kitty.
However, long term investment for the future depends on your investment style. If you are an aggressive investor, you will opt for stocks and shares. A more conservative investor will for government bonds and mutual funds. However, there are different types of investments and you can choose what best suits your needs. But having long term investment for the future is a must if you want to lead a worry-free life after retirement.
There are bonds you can think of. Bonds have a wide range of maturity periods from 1 year to 30 years. You can always choose government bonds issued by the United States government and these are quite safe as the bonds are guaranteed by the government so the chances of default are quite low. If you invest smartly in bonds, you could be lucky enough to see your investment double over a certain period of time.
Many people want to stay away from bonds because they consider them risky. These people can opt for mutual fund investments where the fund manager will decide where to invest your money. You can invest in mutual funds through a broker and he will invest it in the fund. However, what many people do not realize is that mutual funds are riskier than bonds, and it is not the other way round.
There are still others who are more aggressive in their investment style and prepare to risk their money in stocks. Stocks can be an excellent vehicle for long term investment for the future. However, you should be prepared to take risks as the company whose stocks you have purchased does not perform well, you will lose money.
No matter where you decide to invest your money, doing research for long term investment for the future is of utmost importance. This means that stocks of well established companies have to be purchased; your broker for mutual funds has to be reliable with a proven track record; and when investing in bonds, make sure that the bonds are guaranteed by the government.
About Author: Pauline Go is an online leading expert in finance industry. She also offers top quality financial tips like :
Loans With Bad Credit History, Using Your 403b To Pay For College, Federal Credit Union & Financial Services
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June 11, 2008 at 1:34 PM
If you are a long-term investor in stocks, there is a very exciting investment plan. It is most suitable plan both for the beginners and veterans in stock market investments. Most of the investors, whether new or old, are constantly haunted by just one fear: As soon as you start investing in the stock market, the price of your stock will tumble and it will spiral up the moment you sell out your shares most probably, at a loss.
This is not just a phobia, an imagined fear. It is a very real cause to worry especially if you are trying to catch moves or time of the markets. Not only the lay investors, even the professional traders and fund managers also have a hard time gauging the wayward, volatile and unpredictable market moves. Since you are a long-term investor, you do not want to play this type of guessing game with your hard earned money. You want to be on a surer footing. You, therefore, want a strategy that is proven, conservative and delivers good value on your investment over the long run. This strategy is called Dollar Cost Investing.
This type of investment works on the premise that if you buy the stocks of the same dollar amounts on regular basis, the unpredictable fluctuations in investment is squared off over a certain period of time. You basically buy more stock when the prices are low and buy less when the market is high since you are always investing the same dollar amount. You do not have to worry about buying the shares on higher costs and selling them on low. This happens because the risk of the timing is reduced. All you need to do is to consistently invest the same dollar amount on regular basis. If you purchase index funds, your investment will grow with the market. Obviously you are more in tune with the market over the long term.
It must, however, be noted that it is much easier to make such purchases in a rising market when your investment appreciates. You have to be pretty much disciplined and stick to your strategy when the market is falling. You must also be aware of that each dollar buys more in a falling market, which potentially leads to higher gains in the future as the market recovers.
Although it is impossible to predict the market trends in the future, but historically, the market has risen over the long term and it takes the conservative investors right along with it.
Cheapest stock broker on the planet SogoTrade can help you in the securing long term investments for your future.
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