Once you figure out what your goals are when it comes to investments (we help you with this in our previous blog post), it’s time to decide which of the long-term investment options will help you reach those goals. Remember, you don’t need to start huge – in fact, many investments allow you to start with a couple of pounds – so don’t let that misconception mislead you. Here are five of the top long-term investment options to help you increase your wealth:
Shares and stocks
In terms of long-term investment options, most people are familiar with the words ‘stocks’ and ‘shares’. When a person buys stocks or shares in a company, they are entitled to dividends from that company. These are said to be slightly riskier investments than others, as they can fluctuate from day to day. The value of the stock is the key factor to whether you will make any returns on them (which have the potential to be high) but remember that there are no guarantees with stocks and shares.
Forex – or foreign exchange market – is another alternative to long-term investment options. This market is where world currencies are traded in three sessions; the European, Asian and United States sessions. It’s a little like stocks and shares, but it happens in pairs and with currencies. Learning how to trade is easy, but it takes a lot of practice. Perhaps start with one of the free accounts (with virtual money) and take it from there.
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When thinking about which long-term investment options are best for you, it's vital to remember that bonds are much less risky than stocks and shares. Essentially, a bond – also known as fixed-income securities – are loans to a company or government wanting to raise money. Bonds have set time periods and interest rates which you will know from the get-go, making it a relatively safe investment. Remember, while safe, these will potentially yield fewer dividends than stocks.
Mutual funds are one of the most popular long-term investment options because they are a blend of both stocks and bonds. With mutual funds, you will pool your money together with other investors and allow a professional fund manager to buy stocks and bonds for you. This is generally a great place to start when you are looking at investing.
Buying property is one of the best long-term investment options. You can purchase commercial or residential properties to rent out. You could even consider buying abroad, perhaps in popular year-round holiday destinations which could be used as both a source of income and a getaway for you and your family and even a retirement property down the line. The one thing you need to keep in mind with properties, there do come the added costs of maintenance, property manager fees, levies, etc.
Because one can see and touch (and live in!) a property many believe it to be a low-risk investment. However, just be aware that properties do fluctuate in value based on an often unpredictable market.
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Would you like to find out what other long-term investment options there are? If you are particularly interested in the property investment option, then contact us at Grupo Esmeralda. We have an incredible range of holiday villas in Calpe that would make the perfect investment property, holiday home or retirement residence in the future.