You Might Don’t Know that Long Term Investment is very safe & Effective, Today I’ll tell you the most important factor regarding investment strategy are given below:
- What Is Long Term Investment?
- Why Long Term Investment?
- What Is The Benefit Of Long Term Investment?
- An important factor for long term investment?
Full Explanation Of Long Term Investment In This Video
First See the Full Video, you will clear about the concept of Share Market & Then you can go forward!
What Is Long Term Investment?
A long term investment is a way to provide higher returns and security with lower risks. Long term investments usually stay put rather than constantly buying and selling short term stocks.
It abolishes much of the risk and tension of constantly tracking the market to maintain short term investments. Many people often get confused about, “what does the meaning of the long term really mean?”, They think about a specific period of time.
But any investment more than a year is classified as a long term investment. When you do long term investing, you adjust your investments to maximize your returns in the long term rather than expecting results immediately.
This investment comprises your normal equities (stocks) and bonds and investments like real estate too.
Real estate is a good example for long term investing as real-estate prices do not fluctuate like the stock market in the short-term, so you have to invest in real estate for the long run to gain profits out of it.
Setting your investments for the long term signifies that you are planning for your financial goals for the future. This comes helpful when you are saving for retirement.
Usually, people who cannot invest their time to learn all the strategies, patterns, and charts, often prefer long term investing rather than short term trading.
Why Long Term Investment?
Traders expend lots of time working on strategies, methods, and formula to discover which stock is going to earn him profit in the short term.
Trading might work for many people but in my belief, it is not the best way to make money from the stock market.
Trading is based on speculation. There is no system to foresee with confidence, which stock will move up in the short term, which makes trading a bit risky than investing.
It requires a lot of time and effort to trade stocks, you have to keep a close eye on the charts and analyze the pattern of the stocks you are doing the trade.
While investing in the long term, you don’t need to worry about the regular fluctuations of the stock or to analyze every moment of the stock. For a long term investor, the aim is to find a quality business with high potential to stay invested in it in the long run.
Trading demands huge capital to start for noticeable profit gains. This makes it a risky way and you can lose all your investment in a day or a half. Whereas long term investment requires small capital.
You can start with small capital and keep on adding small amounts of money whenever you feel and let the compounding do its magic. Compounding works in your favor to turn a small investment in a huge return.
What Is The Benefit Of Long Term Investment?
In Share Market, there will be many benefits of Investment following below are some of the benefits
It Takes Emotions Out Of The Game
One of the greatest benefits of long term investing is that it nearly removes your emotions and stress from the equation.
A market that can jump a 10% on a single day isn’t going to make you feel anxious about selling or a market crashing all along due to a piece of false news or a bad day won’t make you run for the hills.
Higher Chances Of Profits
Historically, if you align the charts of the stock market in the long run, you will easily notice that you are likely to make money.
However, stocks do have a 50/50 probability of rising and falling, but stocks are bound to fall only to 0 but it has not any upper limit, it can rise infinitely.
If you focus on high-quality businesses with good management and high potential of further growth and expansion then you can surely make your investment portfolio grow.
Magic Of Compounding
Investing in stocks for the long term lets you take advantage of compounding growth, or the ability to reinvest your gains(i.e. dividends) over a period of time to result in even higher profits.
In a long run, with the factor of dividend (which most of the blue-chip companies provide), you can reinvest it with your own small amounts, then over a period of time, you can easily earn the maximum return from your investment.
An Important Factor For Long Term Investment?
There are a various factor for Investment In Long Term Share Market following are below:
Rate Of Returns
For trying to earn higher returns, people often account all the time try to pick multibagger stocks, the best funds, or the most famous market forecaster.
Sadly, the genuine return we get is the one factor that’s essentially out of our hand, no matter how much we learn or how much we know, there isn’t any system yet which can give you the exact rate of return.
How Long We Save
Compound growth shows us that amazing thing happens when we invest our money for a Long term. This means we should start our investment plan as early as possible to take advantage of compounding.
Your Own Analysis
Now, this is the most important factor while investing your money for a longer period of time.
You can’t depend on any stock advisor or any tips for a long term investment.
It’s your money so you have to do the hard part to gain profits from it. You have to almost entirely analyze all the aspects of the company or business you are investing in. You have to do its fundamental analysis where all the financials of the company are involved.
Then you must study the management analysis of the company that what are the future plans of the company, does the company going to expand its business or not, and many more aspects are involved.
After studying all these, you can invest in the company you find suitable for good returns in the future.
After analyzing all the above points, here is my conclusion. If you don’t want to involve as a full-time investor or a trader then long term investment is the best opportunity for you to earn through the stock market.
A normal individual can also invest a small amount of money and can add small amounts over a period of time to take advantage of compounding growth.
But first, an individual should analyze the company properly and choose a quality business with maximum future growth potential and low risks then you can invest in that company without any hesitation.
See Full Video Of Share Market: Mr. Sunil Minglani Click Here!
If you have any doubts regarding the Stock Market, you can comment in the comment section!