The short term picture of the economy at any level is opaque. Theories abound on where the economy will be heading in the next year. However, the long-term thesis on the best investment strategies remains steadfastly consistent. The best investment strategies are ones that provide long-term ownership stakes in assets that produce growth in the future. This article will explore five such strategies.
Invest In Real Estate
The first investment strategy is to invest in real estate. For most people this means buying a home that you can live in for a number of years. Although we have seen periods of bottoming out, the long-term trend for the value of real estate is up and the added bonus of owning a home is that you are building equity rather than simply paying rent expense each month. The Mortgage Professionals of America delve into the specific real estate trends for the rest of the year.
Buying Corporate Bonds
The second investment strategy is buying corporate bonds. This is an investment that can give you both a high return and a stable income. The key is to research corporate bonds for companies that have high cash flow so that they have the ability to pay the interest on the corporate bond over the long-term.
The only real risk with corporate bonds is that the company could go bankrupt and in that case, you wouldn’t see any of your principal returned or get the interest. Assuming that risk is sufficiently mitigated, corporate bonds are a great investment strategy over the long term.
Buying Stocks
The third investment strategy is buying stocks. Unlike corporate bonds, equities are fraught with risk because there is no debtor claim with the investment. The risk of losing your entire investment is omnipresent so you must invest judiciously. However, with that increased risk comes a very high ceiling on the return side.
The other benefit of investing in stocks for the long-term is that there is a capital gains tax that is lower when you invest in stocks for over a year. There is also a component to some stocks called dividend payments which will give you a steady income stream while you wait to get a return over the long-term.
Investing In Gold
The fourth investment strategy is investing in gold as a hedge against inflation. Gold is the most reliable asset class for investors because it is in extremely limited supply. There are gold mining companies that you can invest in but you can also procure actual gold bullion. Visit website for tangible examples of gold bullion that can be purchased safely online. Securing physical gold is a great long-term strategy for those who want to hedge against currency fluctuations.
Increasing Your Saving For Retirement
The fifth and last investment strategy is increasing your savings for retirement. Here are some great tips for getting started and pushing through investment inertia. The big advantage of retirement savings is that they are made tsx-free up to the IRS limits on an annual basis. You get to set aside money without being taxed on it and that money will grow over time if you are patient and avoid hardship withdrawals.
Retirement savings will safeguard your future and give you boundless opportunities in the later stages of your life. The best strategy is to invest in target date funds or ETF’s that essentially follow the market’s performance.
Conclusion
The key to all of these strategies is patience and diversification. If you are willing to invest for the long-term and make sure that you have exposure to multiple asset classes you will almost always be rewarded with solid returns. There are always going to be short-term shocks to the market that are unpredictable, but don’t let that shake your long-term approach.