The investment can be used for all kinds of stays: short, medium or long term. Depending on them, you will have to apply one or another strategy that allows you to make the savings profitable in the most satisfactory way. But long-term investment is perhaps the great unknown for many small and medium savers. It includes a series of characteristics that differentiates it from other investment formats. If this is your intention from now on, you should pay a little attention to how to formalize it in the financial markets.
Long-term investment is neither better than worse than the rest, but only an alternative offered by the markets to materialize your decisions. In any case, you should know that you will necessarily have to have immobilized money for longer. This factor is very important so that you can anticipate the unexpected expenses that will develop during the next years. A long-term term is considered to be all stays that range from approximately 3 to 10 years.
Of course there will be some financial products more likely to adapt to these periods of permanence more durable. Not only from the purchase and sale of shares on the stock market. But also investment funds, listed and even the deposits linked to a financial asset. There are no exclusivities regarding which decision you are going to make from these very moments. Do you want to know some of the most suggestive proposals to invest your money?
Long term on the stock market
It is the most suitable solution for a rather defensive or conservative investor profile who seeks security over other considerations. Normally in these periods it is easier to obtain a fixed return, although it will certainly not be formalized under truly spectacular potentials. But with the advantage that you will not have to be aware of the markets equity every day. For this you have values that are specially intended for these terms. As for example, electrical, food or even the highway sector.
In these periods they allow you to have greater margins in the errors that you can make in the selection of the securities that make up your investment portfolio. With more flexible contributions that will depend on the income and expenses you have ahead of you. And always thinking that you should keep some monetary funds before any incident that may happen to you from now on. In any case, it is not convenient that you allocate all your assets to this kind of operations. But on the contrary, it will be more than enough to contribute 60% of it.
Strategies in the stock market
A very effective action to channel the long term is by opting for the securities that distribute dividends to their shareholders. In this way, you will have a few fixed and guaranteed income for all years. With a profitability that can reach 8% in the best of cases. Whatever happens in the financial markets. Because you will be forming an investment in fixed income within the variable. But with a much more satisfactory profitability than in those. T with a much more favorable tax treatment for your interests.
If for any reason you see that after a few months you are losing money in the investment, you should not worry excessively. Not surprisingly, you have many ahead to overcome positions and even generate very generous capital gains. In stock markets it is said that long-term operations always pay off. You only run the risk that the selected security may go bankrupt and then you will lose all your financial contributions. For this reason, you will be forced to opt for first-rate values. Or at least they offer you the minimum guarantees to channel the investments.
Funds: very suitable for these terms
But if there is a product that is adapted to the long term, it is the investment terms. In any of its variants. They are based on equities, fixed income or even intermediate or alternative options. All of them can be used to satisfy your expectations of forming a powerful savings bag. You should opt for one of these values depending on the profile you present as a small and medium investor. But with a great difference with respect to other investment models and that is that through this financial product you will better diversify your savings.
In addition, investment funds open up the possibility that you can transfer them to other funds at the time you want. With a very beneficial consequence for your monetary interests since these operations can be carried out exempt from any expense. And as many times as you want since you can even go from a fixed income investment fund to variable. Depending on the scenario presented by the international economy at all times. From this point of view, it is a more flexible financial product that can be formalized under an active management model.
Investment funds, on the other hand, allow you to access more investment proposals. Based on the most unexpected financial assets, such as raw materials and precious metals. Being in any way one of the formats that best behave in this kind of timeframe. Even better than buying and selling shares on the stock market. Although on the contrary, you may find yourself with more commissions that will increase the final cost of the product.
Deposits linked to the exchange
One of the most conservative strategies that you have at the moment is materialized through the term deposits that are linked to other financial assets. Including of course those from equities. In either case, it will help you to guarantee profitability every year. Although its performance is not very spectacular since it rarely exceeds the level around 2%.
One of the characteristics of this banking product is that you can improve the guaranteed profitability. For this you will have no choice but to comply with minimum requirements. In other words, the basket of shares reaches a certain price under the conditions. It is not always feasible that it can be beaten. Therefore, the additional profitability that is promoted from these financial products cannot be obtained. Because if the return on savings is met, it would rise to 5%. In any case, in no way can the real profitability attained by the securities, baskets or financial assets linked to these savings models be achieved.
It is an option that requires higher contributions than in other classes of time deposits. Usually above amounts greater than 5.000 euros. With also higher terms of permanence, between two and four years and without the possibility of canceling the contract. Unless you do not pay a commission that can be 2%, which would reduce the competitiveness of this product that is not strictly considered as an investment. But rather for savings. You can hire it to defend yourself against less favorable scenarios for the financial markets.
The most aggressive are not suitable
Equities have another model, but they are more aggressive in their structure. None of them are meant for the long term. Not in vain, you risk losing a good part of your financial contributions. Especially because of their excessive volatility that does not make them very conducive to long-term operations. It is in the shortest terms where they offer their greatest effectiveness and not more than two years. If you hire them, it would be a mistake that you could pay dearly after the years. It is a lesson that you need to learn in your relationships with the always complicated world of money. To the point that you will take completely unnecessary risks.
These kinds of products are a huge activity and you cannot put yourself in the hands of luck. You also run the serious risk that after a few years you will see how part of the invested assets have disappeared. And it will be very difficult to correct this incident unless you are willing to assume the losses generated in each of the operations. Do not forget that the price differences in a single trading session can approach 10% or even more in certain cases. In this sense, the best thing you can do is stay away from these formats intended for investment. Especially if your periods of permanence are destined to the longest periods.
As you may have seen, you not only have to limit yourself to trading on the stock market. You have other alternatives that may be more satisfactory at some point or another. Because as is usually said in these environments, there is life beyond the bag. And much more regarding the long term. With a very defined objective and that is none other than making the savings profitable in the most correct way. Because it will take many years for your benefits to go to your savings account.