What is Long-term Investment?

Ever heard of the term long-term investment? What is your view on this type of investment?

Investment has become one of the activities favored by many people until now.

With investment, you can maintain your wealth assets in the future, so that later you will have a definite financial guarantee.

Many still do not realize the importance of investment, but not a few have also prepared themselves to invest.

There are two types of investment itself, namely long-term investment and short-term investment. Then, what is a long-term investment and what are some examples of these investments?

Meaning of Long-term Investment

Long-term investment is the investment of assets over a period of more than one year with the aim of mastering another company.

This means that long-term investments do take a long time, can be up to a year or more to achieve high profits.

In short, company A invests heavily in company B.

Then company A gains very significant influence over company B without having a majority of the share votes.

In that case, the purchase price will be referred to as a long-term investment.

Long-term investments are obviously very different from short-term investments.

In general, short-term investments only take less than 1 year to be able to disburse funds or profits. Usually, short investments are likely to be sold to other people or companies.

While long-term investments take a long time, it can be a year or even more.

There are even some cases of long-term investments that will never be sold at all.

If you decide to become a long-term investor, then you must be willing to be patient for a fairly long time.

With your patience, the potential amount of profit you will get is very high.

Types of Long-term Investment

1. Gold

Gold has long been one of the investment instruments for a long period of time because it has proven to be very profitable.

Because the value of gold does tend to increase from year to year. If it decreases, then the decrease in value is not too significant.

Another advantage of this gold investment is its very high liquidity. So, you don’t need to worry when you want to exchange gold into cash at this time.

In addition, it can be said that investment in the form of gold has minimal risk and is resistant to inflation.

Currently, there are so many places for you to start investing in gold. You can invest in gold in the form of bars, gold coins or jewelry though.

Choose according to what you want and aim for. After that, don’t forget to learn the basics of gold investment so you can follow the development later.

2. Saham

In addition to gold, stocks can also be one of the long-term investments for you with large profits.

According to Good Financial Cents, there are several advantages of stock investing that make this investment a good long-term investment:

  • You don’t need to manage property or business because stocks are investment “papers”
  • Stocks can rise in value, even significantly over a long period of time
  • Investing in stocks is tantamount to investing in the economy
  • You will get dividends, profits from the company
  • Stocks have high liquidity
  • You can invest stocks into international classes
  • Investment Diversification
  • With these various advantages, stocks are one of the investment instruments that are suitable for you.

Try for beginners to learn stock investment tips in advance so that they can understand the flow in the future.

3. Property

One of the products with a very high long-term investment value is land or land as well as buildings.

As we know that the selling value of land tends to increase from year to year. This includes when you build a building on the land.

So don’t be surprised if there are currently a lot of housing around you.

Why is it experiencing an increase in price? Because every year the demand for houses or land always increases. Home becomes one of the primary needs for humans.

It can be said that every year the value of property investment every year increases by 20%.

However, this property investment is certainly different from investing in gold and stocks. The reason is, when you want to start property investment, then you will need a lot of capital.

4. Bond

This investment instrument is usually very preferred by entrepreneurs and investors.

Bonds themselves are debt securities that are handed over by the borrower to the lender. In this letter, your name is listed as well as the due date of the loan.

In addition, in the letter there is also interest which is a loan obligation. Usually the investment period of a bond is from 1 year to 10 years.

5. Mutual Funds

Mutual funds can also be used as one of the long-term investment instruments. In particular, the most suitable type of mutual fund for long-term investment is stocks.

Stock mutual funds themselves are mutual funds that allocate investor funds to the capital market, which in this context is stocks.

This investment is suitable for beginners who do not understand stocks. The reason is, there are investment managers who help choose the best stocks.

Leave a Comment