In our Best Long-Term Investments in 2019 guide, we’re going to present 15 asset classes that we think you should take a closer look at. This will include the likes of stocks and share, ETFs, mutual funds, real estate and more.
By the end of reading our guide, you’ll have the required information to begin your long-term investment journey.
Before we get started with our top 15 picks, let’s quickly clarify what we mean by a long-term investment.
What is a Long-Term Investment?
As the name suggests, a long-term investment is a financial asset that you hold on a long-term basis. In terms of defining long-term, in the online investment sector this is generally considered to be an investment that you hold for at least a year. However, in many cases this can be much longer.
One of the key characteristics of a long-term investment is that activity levels are significantly more passive than short-term investing. In other words, once an asset has been purchased, investors are able to sit back and allow their investment to do their thing on the open marketplace.
This isn’t to say that research isn’t required. On the contrary, traders still need to be aware of any micro or macro economic events that might have a direct impact on their investment. Nevertheless, this is managed on a passive basis, rather than active.
In terms of the overarching aims of a long-term investment, this can be broken down in to two key forms – income and growth.
Earning Income via a Long-Term Investment
When experienced traders refer to an ‘income’ based investment, they are making reference to an investment that yields regular cash flows. This can come in a number of forms, such as a blue-chip stocks investment that pays quarterly dividends, or a real-estate investment that pays monthly rental payments.
Generally speaking, these types of long-term investments are lower risk, as investors seek to gain steady, but regular growth in the form of income.
Earning Appreciation via a Long-Term Investment
An additional form of growth that traders like to see in a long-term investment is that of appreciation. For those unaware, appreciation refers to an asset that increases in value in the open marketplace.
Sticking with same examples as above, this could include a long-term stocks investment that achieves growth on the stock exchange, meaning that the underlying share price increases in value and thus, rewards the investor with higher returns.
In the real estate market, this could be a property that is worth more on the open marketplace, meaning that once sold, the investor will receive more money that what they paid.
Ultimately, it is always hoped that a long-term investment can achieve growth both in the form of income, as well as appreciation. However, when choosing an asset class to invest in, traders often choose an investment based on the types of growth it most commonly achieves.
15 Best Long-Term Investment for 2019
So now that we’ve explained what a long-term investment actually is, as well as the difference between income-based growth and appreciation-based growth, we are now going to present to you 15 of the best long-term investments for 2019.
Take note, we’ve decided to focus on the underlying asset class or industry, with the hope that you will be able to perform additional research in to the specific asset that you want to invest in.
Long-Term Investment Strategies
If you’re looking for some potential strategies that will help you kick-start your long-term investment journey, then we’ve listed 10 useful tips for you to consider.
Although this point might sound somewhat obvious, one of the most important tips we can give you is to spend ample time researching your chosen asset. Although you’ll be required to spend a lot less time doing this in comparison to short-term trading, it is still important to research the long-term potential of your investment.
This should include any key industry developments that are likely to effect the value of your investment. For example, if you’re investing in the marijuana industry, one the most important factors that you need to keep an eye out for is government regulation and policy making.
Unlike short-term investing, you are going to be holding on to your assets for a very long time. As such, it is almost certain that your chosen marketplace will experience turbulence along the way. Just because your investment goes through a period of decline, it doesn’t always mean that you should simply offload.
In many cases, bullish assets require a market correction, which is usually a result of institutional investors cashing out their gains. Be patient, as its key to long-term investing.
3. Consider What Types of Gains you Want to Target
As we discussed earlier, some assets are suitable for regular income, others for appreciation gains and some are a combination of the two. Whichever option you go for, it is important that you have a fundamental understanding as how you’re going to make money.
If you’re ever unsure which strategy is right for, your best bet is to invest in assets across both growth categories. This might include some high-yield dividend stocks alongside Gold-backed ETFs.
4. Understand Fees
Not only is it important to understand how you are going to achieve gains, but you also need to have a firm grasp of fees. No matter how good online brokers are at advertising, investments are never free.
In the vast majority of cases, you’ll either pay a flat-fee per trade, or a percentage of the total amount invested. This is important, as if you are only planning to invest smaller amounts, you don’t want to get crippled by constant flat-fees that are going to eat in to your potential profits. On the other hand, if you’re investing significant amounts, then a flat-fee is probably better.
Although long-term investing is more about sitting back in a passive manner, you should still formulate some key targets. While it is true that long-term investments should be held for extended income or appreciation gains, you always want to have an exit strategy.
For example, when the stock markets crashed in response to the 2008 financial crisis, it took a good few years before blue-chip companies recovered their losses. You would have been smart to exit at this point and re-enter the once it appeared the markets were beginning to bottom-out.
6. Re-Invest Dividends
If you’re looking to increase your wealth on a long-term basis, then you need to consider re-investing your gains. If this is in the form of dividends, then as soon as they are issued you should look to invest them back-in to one of your assets.
In the long-run, this will have the effect of compounding interest, as you’ll get the chance to earn growth on the money that you re-invest,
One of most important factors that you need to consider as a long-term investor is diversification. This means that your investments are spread across multiple assets that operate in multiple spaces.
For example, you’ll likely want to diversify across stocks that operate in different industries, such as the financial, technology and retail segments. Moreover, your diversification strategy should also cover a range of asset classes, such as adding mutual funds, ETFs and cryptocurrencies on top of traditional shares.
8. Never Expect Market Recovery to be a Sure Thing
Although we previously mentioned that you need to be patient, you always need to recognize when it it time to exit a trade. Newbie investors often make the mistake that assets will eventually recover in the open marketplace, however this isn’t always the case.
History suggests that multiple companies that we were once told could never fail, did just that. Think the likes of the Lehman Brothers and Enron.
9. If You’re Unsure, Seek Professional Assistance
There is no shame in admitting that you just don’t know which assets to invest in. As there are literally tens of thousands of main-stream asset to choose from, knowing which ones to back can be a right headache.
To ensure that you don’t miss out on some key opportunities, you might be best to stick with actively managed mutual funds. Although this will be more expensive than going it alone, you’ll have an experienced investor managing your money on your behalf.
10. Never Invest More Than you can Afford to Lose
This last point is perhaps the most important. While the main objective of investing long-term is to make more money than what you started with, there is never any guarantee that this will happen.
As such, you should never invest more than you can afford to lose. If you want to play it safe, you could also consider investing regular, smaller amounts, instead of investing a lump sum.
Best Long-Term Investment Platforms
So now that we’ve covered the best 15 long-term investments of 2019, alongside 10 crucial investment strategies, we are now going to list 5 of the best platforms that can facilitate your long-term investment goals.
The platform that you decide to go with will depend on your individual circumstances, and should include key factors such as fees, user-friendliness and the type of assets that are listed.
In conclusion, if you’ve taken the time to read our guide in its entirety, then you should now have a very good idea as to what it takes to succeed in long-term investing. To help you along the way, we’ve discussed 15 of the best investment ideas for 2019 and beyond.
Whether its stocks and shares, ETFs, debt mutual funds or cryptocurrencies, we’ve suggested something for all risk levels.
Ultimately, if you have the right mind-set to engage in patient and passive investing, then you’ll no doubt get your long-term trading journey off on the right foot.
How are long-term investments defined?
In its most basic form, a long-term investment is an investment that sees the asset held for at least one year. Anything less than this and you're in short-term investment territory.
How much time do I need to commit to long-term investments?
One the great aspects of long-term trading is that it is more of a passive investment strategy. As such, although you will still be required to perform independent research, this is significantly less time consuming than the short-term investment space.
How do I make money when my investments are long-term
When it comes to making money in the long-term investment space, this can be on two main fronts. You can make money in the form of dividends, which is a long-term income-based growth strategy.Alternatively, you can also make money when the underlying asset appreciates on the open marketplace. The best long-term investments are those that offer both revenue streams.
What is the lowest-risk long-term investment i can make?
If you're looking to invest long-term, but want to keep your risk-levels to an absolute minimum, the you might want to consider bonds. This is especially true with government bonds from strong economies, as it highly unlikely that the government is going to default.
What long-term investments offer the highest returns?
If you're familiar with the 'Risk vs Reward' model, then you'll know that the more risky an asset is, the higher the returns should be. In this like-for-like spectrum, you'll likely find cryptocurrencies at the very top. On the one hand, while cryptocurrencies are very high-risk, the potential returns are huge.
What do I do if I can't find any long-term investments to back?
If you're struggling to take the plunge, or simply not sure which assets to back, then you're probably best sticking with a long-term mutual fund. While this does come at a slight cost, you'll be using a highly experienced fund manager that looks after your investments on your behalf.