How to invest your money and get good long-term returns
If you have cash to spare and you are looking for a way to make your money work for you, then investing it could well be on the cards.
While some people are all about short term investments and quick gains, most will prefer a long term option that will grow in value over time without needing any additional thought or attention.
With that in mind, here are some tips on how to build an investment portfolio that will deliver solid returns with as little risk as possible.
Understanding the stock market for long-term investments
The stock market can be an intimidating investment prospect for newcomers, so knowing where to invest money for good returns without needing to become obsessed with watching the ups and downs of market activity is important.
As mentioned in the article from Ridgewood Investments, the key to seeing gains from your stock market investments is taking a long view, researching the companies you invest in carefully and being willing to hold firm in the face of market fluctuations.
If possible, choose companies you know and trust, and remember that if they are profitable then shareholders will receive dividend payments, which means you do not even need to sell to generate a return.
Getting expert advice from a financial advisor before investing in the stock market is definitely sensible, and you also have to be prepared to accept losses as well as gains if you take this route.
Considering real estate to foster your nest egg
In terms of sheer popularity, investors looking for substantial returns in the long term tend to be won over by real estate.
There are of course quite a few obstacles to overcome in this context, both in terms of the sheer amount of capital required upfront, in addition to the fees, expenses and maintenance responsibilities of being a landlord.
However, if you are happy to leave your money locked up for a decade or more, then investing in property can be a fairly secure and stable solution.
As well as being able to make cash based on the eventual sale price of any premises you purchase, you can also generate rental income from either domestic or commercial clients, depending on how you build your property portfolio.
Dips in demand and changing trends can of course hurt your real estate investment, but you can also benefit from unexpected upticks in activity that are to your advantage.
Exploring savings account options
The attraction of savings accounts has fallen somewhat in recent times as a result of low interest rates and the difficulty of getting good deals from traditional banks.
Thankfully there are a lot more options for those looking for high yield savings accounts thanks to the growing number of online-only operators, so comparing the market and playing the field using digital tools to do so is a possibility today.
Likewise the benefits of earning interest from a savings account as opposed to investing it in something potentially volatile like the stock market or real estate is not only that the risks are virtually non-existent, but also that your money will be easier to access when you need it, depending on the terms of the account.
Setting up a good investment strategy
Ultimately you should aim to have a varied strategy for making long term investments which is not entirely reliant on the performance of a particular element of the market; in other words, do not put all your eggs in one basket.
With expert advice and plenty of personal research, becoming an investment expert will be easier than you might think.
Photo by Luo Lei