There is no set length of time that someone needs to be invested in a specific type of financial plan before they are considered long-term. It can take 3-5 years, or even longer for an individual's inclusion on the timeline to improve results.
Long-term investments help with securing funds for your future, as well as provide a steady income in the meantime. You can also start small and allow the assets to grow over time.
Here is an example:- Let's say a fund has had an average 10-year return of 12%..
If the value of this mutual fund increases at a constant rate, an investment worth Rs 10,000 will be worth over Rs 22,000 after ten years.
There are many types of investments you can take for the long-term.The first step is determining what constitutes “long term” for you, which could be anything from three years to thirty years or more.
You may choose to have different long term portfolios that each has a particular focus, such as financing retirement or your
When looking to invest in the longer term, do your research before choosing a fund. Find out which categories each category falls under and read about them more until you find the one that matches your risk tolerance.
For example: Small cap mutual funds offer higher risk, while the opposite is true for large-cap funds.
There is more risk in investing into a credit risk fund than most other debt funds.
You should also assess your risk level. Your risk level should be in line with your investments because if they're different, it'll be better for you to put yourself and money into higher-risk classes than the other way around.
The most effective long-term investment strategies will be different for each individual because they depend on their goals and risk profile. When you are clear on your objectives-- whether it is retirement, higher education, buying a home, paying for children's education or more--you can invest accordingly.
If you're in your 30s, how your retirement portfolio changes depends on the age at which you plan to retire. At a given age, the risk level of investments may change.
As a golden rule, diversify your investments. Diversification provides protection against the worst of most assets. Things may not go wrong if you have very high-risk appetite, but when it does happen, risk will be limited to 100% exposure with risky products and losses could be incurred .Diversifying investment portfolio helps people to maximise returns.
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