Stock to invest long term

These are the most profitable types of investments in the long term.

The saver has dozens of options when it comes to planning the future of his personal economy: investment capital, listed shares, unlisted debt, quality real estate assets, precious metals, or investment funds that bet on cutting-edge technologies or a brighter world. sustainable. Receiving good financial advice is key to choosing the best solution to take care of financial health, taking into account the circumstances of each person.Stock to invest long term

The great poets and writers are often capable of summarizing in a simple sentence the most complex theories of economic science. “Markets in the short term are a voting machine, but in the long term they are a thinking machine.” The quote is from Mark Twain (1835–1910). And he comes to say that, sooner or later, the financial markets end up reflecting the true value, growth, and performance of each of the assets.

Investing well takes time.

Economics books—which are based on what has happened throughout history and its lessons—say that an asset (gold, stocks, real estate, or bonds) wins based on the way it combines four essential elements:

  • Interest rates are also known as interest rates or the price of money. They are established by the central bank of each country (in Europe, the European Central Bank) and set the course for various products such as mortgages or deposits.
  • Profitability: a percentage of the operation’s return on investment. No formula is perfect. Fixed-rate investing is safer because it guarantees the return of the invested money and a series of interest payments, but profitability is usually lower. Since the return on a variable-rate investment depends on economic conditions and financial markets, the investor takes on greater risk, but the reward is higher.
  • The risk premium, sometimes called country risk, sovereign risk, or debt spread, is the differential between two countries’ debt interest rates. Investment risk increases premiums.Regulation, technology, economic growth, and geostrategic shifts affect its movement.
  • and another cousin, that of illiquidity. That is, the compensation for not being able to dispose of the asset immediately

Every economist has their own way of reading.

There is no single beginning, middle, or end. Some experts argue that, in the long run, the most profitable assets are those that provide a good risk premium along with an illiquidity premium. What Twain words would we be reading? Capital investment, or ‘private equity’ (money, let’s think, destined for emerging companies), unlisted debt, and real estate assets (houses, plots, apartments) of high quality.

The renowned American writer would tell us to pay attention since more of us live on the same earth.In 2020–2022, the Hong Kong 33 fell 20% while the Nasdaq 100 surged 69.7% due to coronavirus measures.Markets are volatile now.

Precious metals have historically protected savers from wars, uprisings, inflation, instability, huge public debt, and loss of purchasing power. He understands economic value and collective subconscious.The gold standard, abolished by Richard Nixon in August 1971, was related to 20th-century violence.

According to AFI data, these metals remain strong. They always had that golden sanctuary atmosphere. Gold rose 23%, silver 26%, and platinum 1.2% from 2020 to the present. Copper (53.6%) highlighted the raw material growth associated to green energy.Electric vehicles need it.Stock to invest long term

But behind this universe of assets are people and criteria. Analysts have clear rules. Long-term investments:

  • They shouldn’t follow speculative reasoning (the market’s activity and the months raise and lower prices).
  • It’s a waste of time to use funds for urgent expenses.
  • Invest what is dispensable, and be very clear about the risk profile you are willing to assume. It is a warning as classic as it is true: “Past returns do not guarantee future returns “.

Assets to consider investing in

  • Shares (income variable) They are the shares of companies listed on the financial markets.
  • Sovereign bonds (fixed income) Debt securities issued by governments
  • Corporate Bonds (fixed income) Debt securities, but issued by companies
  • Commodity futures Products such as oil, cereals, or precious metals (gold and silver) are listed on the markets.
  • Currencies . They can be bought and sold at constantly changing prices.
  • Investment funds are a legacy of several investors, managed by a management business.
  • ETF: Exchange Traded Funds, is an investment fund whose mission is to replicate the evolution of an index or a basket of values.

One of the world’s most successful investors, Warren Buffett, argues investing for life doesn’t require a high IQ, business skills, or inside information. “Decision-making requires an intellectual infrastructure and the ability to keep emotions from undermining it.”.”Stock to invest long term

We will be happy to hear your thoughts

Leave a reply