7 Long-Term Investment Ideas That Can Help You Reach Your Goals

It is a well-known fact that long-term investment is one of the best ways to build a robust portfolio and get closer to achieving your goals. But what investment avenues should you consider for investing for a long duration? Find out in this post.

Long-term investment in good investment plans can go a long way in providing inflation-beating returns.

Besides building a retirement corpus, long-term investment plans can also help you create wealth. The power of compounding helps wealth grow over time. But what does the term long-term investment mean?

While long-term investments can be subjective depending on various factors, such as your financial goals, asset class, and risk appetite, investors should carefully consider all the factors and then take informed decision. 

In this blog, let’s focus more on some long-term investment avenues that investors can consider. 

7 Long-Term Investment Options You Can Explore

• Gold

As Indians, we have always liked investing in gold, particularly in the form of jewellery. Whether it’s Dhanteras during Diwali or Onam and Ugadi, we have a tradition where we buy and invest in gold products like coins, ornaments, etc. 

While gold undoubtedly looks beautiful, it can also be a good investment option to grow your wealth.

Moreover, gold prices are relatively less volatile than other market-linked investment options. Therefore, if you invest in gold for the long term, then it can potentially help you preserve your wealth.

While physical gold is the obvious option, today, there are other ways as well to invest in gold.

• GOLD ETF

You can invest in gold ETF (Exchange Traded Funds), where the fund manager uses your money to purchase gold at current market rates and allocate equivalent gold ETF units. One unit of a gold ETF unit equates to one gram of gold. Unlike physical gold, you can trade these gold ETF units in the market like equities. 

• GOLD Mutual Funds

Gold mutual funds use Gold ETFs as an underlying asset. Unlike Gold ETFs, gold mutual funds don’t require investors to have a Demat account.  

• Mutual Funds

Mutual funds have emerged as an excellent investment option. Mutual funds in India have consistently compounded the investor’s wealth for the last 10-15 years, especially since the liberalisation of the Indian economy. 

While mutual funds might experience volatile returns in the short term, you can invest in mutual funds for a long term, preferably three years or more, to reap the benefits of power of compounding. If you invest in mutual funds that have considerable exposure to equity-linked instruments, you might get inflation-beating returns in the long term.

Remember, mutual fund investments are subjected to market risk. Therefore, mutual funds are suitable for investors with a certain risk appetite. However, risk-averse investors can also invest in mutual funds through options such as debt-instrument, which are known for their relatively low but stable returns than equity funds. 

One of the best things about mutual funds is their wide range of flexibility. For instance, you can invest in mutual funds that are focused on specific themes like large-cap, small-cap, sectoral funds, etc.

So, you can find a mutual fund that best suits your investment objective or philosophy and your risk appetite. 

A Systematic Investment Plan (SIP) is one of the most preferred modes of investing in mutual funds. It enables investors to build their investment portfolio gradually through small monthly investments. A monthly SIP can begin from as minimum as ₹100 only.

• Stocks

Investors can invest in stocks if they have a valid Demat account with a SEBI-registered stockbroker. Good quality stocks have been instrumental in creating stupendous wealth for investors. However, investors should invest in stocks directly only if they are confident in their stock-picking abilities. Investors should do a thorough research about the company and their financials before buying any stocks.

Besides, the stock market is highly volatile, with continuously changing stock prices. The market reacts to numerous factors like macroeconomics, global news, quarterly balance sheets, etc. Therefore, investors should invest in equities for the long term only if they have high risk appetite. 

But investing for the long-term puts’ investors in a better position to ride out the short-term market volatilities and has the potential to generate higher returns.

• Fixed Deposits

Fixed deposits are one of the safest options compared to market-linked products. Therefore, FDs have always been a preferred option for risk-averse investors who don’t mind lower but fixed returns. Apart from bank fixed deposits, today, investors can purchase corporate fixed deposits of companies with high credit ratings.

• Public Provident Fund (PPF) & National Pension Scheme (NPS)

PPF is one of the most popular government-backed fixed-income options. Risk-averse investors can invest in PPF to earn risk-free returns. PPF can help build a retirement corpus. Additionally, investors can get a tax deduction of a maximum of ₹1.5 lakh by investing in a PPF account in a financial year. Reputed financial firms provide a free online tool for calculating PPF amounts by providing your yearly PPF contributions and expected rate of interest.

Apart from PPF, you can also invest in the National Pension Scheme (NPS) to earn regular income after retirement. NPS also gives the option to change the pension scheme and the fund manager. You can invest in the National Pension Scheme by opening an account online at the NPS Trust website. Investors can also avail an additional deduction for investment upto Rs. 50,000 in NPS (Tier 1) under subsection 80CCD of the Income Tax act.

• Real Estate

Historical data suggests that the value of property prices almost always appreciates in India. So, you can invest in real estate if you have enough lump sum amount to invest for the long term. You can either wait for the property prices to appreciate or develop your property to earn rental income. 

Additionally, if you manage to invest in real estate in an area under development, then you are more likely to earn manifold returns on your investments.

On the flip side, real estate investments rank lower in terms of liquidity. You can’t sell your property anytime you want. Sometimes, you might have to wait a while to find the right buyer to get the appropriate price.

• Bonds

Both government and corporate houses sell bonds to raise funds to finance their operations. You can invest in bonds if you like investing in debts. If you invest in bonds of companies with a good reputation for a long duration, then you can get significant returns on your investments.

There are various ways to buy bonds in India. For instance, you can buy bonds through a stockbroker, bank or bond dealer. You can also use RBI retail direct website to purchase government bonds directly from RBI. Alternatively, you can buy mutual funds that invest in various bonds.

India is one of the world’s fastest-growing economies. So, it can be the right time to participate in India’s growth story by gradually building a long-term diversified portfolio containing different financial instruments. 

But before you go ahead, you might need to open a few accounts, such as Demat or others. The right way to go for this is to download an app that lets you invest across various categories, such as Moneyfy by Tata Capital. Through one single account, you can begin your investment journey smoothly without worrying about losing track of your investments.