Best Long-term Investment Platforms
You can use long-term investing to secure your future financially. Even though it is risky, it remains one of the most reliable ways to grow wealthy after some years. Most people who have benefited from long-term investments can attest to the fact that the riskier investment options they chose were the ones that gave them better rewards over time. Astonished? You too can become a successful long-term investor. You can start by following this guide.
What is a Long-term Investment?
Any investment that brings high income after a long time, generally five or more years, is called a long-term investment. Usually, investors start long-term investing with large capital, taking high risks in the expectation of high rewards. Professional investors base their choices of long-term investments on their individual strategic financial goals and levels of risk tolerance.
Types of Long-term Investments
The most common types of long-term investments you can choose from are as follows:
A stock is a share of ownership in a company. Companies sell stocks to raise cash. When investors speculate that the value of the stocks of certain companies will increase in the future, they buy the stocks. If the value later goes up, they will sell the stocks to make money. Investors also make money from receiving dividends – distributions of the earnings of the companies they have invested in.
Bonds are loans taken from investors and given to a company or government. They are generally not as risky as stocks. The investors are to receive periodic interests until the bonds mature. The main risk linked with bonds is the likelihood of the borrower defaulting in repayment.
Mutual funds are ideal for investors who do not find picking and choosing individual stocks and bonds appealing. They are large investments that investors can purchase in a single transaction. You may invest mutual funds in a particular type of bonds or stocks, or a mix of both. When a mutual fund earns dividends or interest, the investors get their proportions of the gains.
A Roth IRA is a kind of Individual Retirement Account (IRA) that you can deposit money into and allow your funds to grow without paying any tax. It lets you make regular contributions that you can invest in bonds, stocks, or other investments. It is a very good way to invest (save) for retirement.
Similar to other types of investments, it is risky to invest in Bitcoin and other crypto assets, yet potentially highly profitable. Some persons have received jaw-dropping returns from investing in cryptocurrency. The innate volatilities of crypto products, fierce competition among several thousands of blockchain projects, doubts about industry regulation, and the vulnerability of cryptocurrency exchanges to cyberattacks are the major risks in this kind of long-term investment. However, the blockchain industry and cryptocurrencies are growing stronger and becoming more attractive to investors and FinTech giants like PayPal and Revolut. So, investing in crypto depends on your goals, preferences, and risk tolerance.
Long-term Investment and Risks
Going into any long-term investment demands weighing the risks, which implies, knowing fully well that there is a chance to lose your money. In addition, it requires being prepared to wait for a long period to see the outcome of your investment. In the meantime, rising inflation could reduce the value of the expected cash flows from your investment in bonds – cash flow risk. Other investment risks to put into consideration include discount rate risk (for there is a fall in asset prices when there is a rise in discount rates), and reinvestment risk (originating from the exposure of reinvested profit to new rates that might not be favourable).
Benefits of Long-term Investing
Although long-term investing is risky, the high risk involved also makes it highly beneficial under favourable conditions. The following are the benefits of investing for the long-term:
Frequent short-term investments incur many costs, which include transaction fees, stockbroker fees, capital gains taxes, stamp duties, and other administrative costs. However, you can reduce the overall cost of investing by going for long-term investments.
Small money, big returns
There are funds you can start to invest in with as small as €25 and add to your investments monthly to build a big portfolio in the long term. Also, there are mobile apps and digital investment platforms that allow you to start investing with very small money. We will present them soon.
Long-term investments produce better returns. Besides, through compounding, which is a process that helps investors to earn more money by reinvesting their dividends or interest, long-term investments can yield higher returns. For instance, if you invest €10,000, which is to grow at 5% per annum, without charges, it will produce €500 annually. In 30 years, without reinvestment, it will amount to €15,000. But if the annual gain is re-invested every new year, excluding charges, the return will be €33,220 – which is more than double the profit that can be made without reinvesting the annual yields.
Best Apps for Long-term Investment
Now, here are the best mobile apps and digital platforms for long-term investment in terms of functionality, security, safety, reliability, speed, and convenience. However, this list is focused on crypto investment platforms because crypto assets are one of the fastest-growing instruments for both short-term and long-term investments. If you are looking for the best non-crypto investment solutions, you can find them in our previous post.
eToro is an investment platform that allows you to buy and sell multiple assets, including stocks, and crypto. On this digital platform, you can invest with a variety of Exchange-Traded Funds (ETFs), which could comprise stocks and bonds, for long-term investment. It lets investors enjoy 0% commission when they invest in stocks. Moreover, you can also buy crypto assets like Bitcoin and Ethereum with ease. Globally, eToro has over 25 million users.
The leading crypto exchange in the world today is Binance. It is a great platform for investors to buy, sell, and hold over 600 cryptocurrencies. It has 90 million registered users, charges very low transaction fees, and supports the use of a variety of payment methods in funding your crypto account. With Binance, you can invest on a recurring basis using its Recurring Buy and Auto-Invest features.
Kraken is one of the largest crypto exchanges in the world. It allows you to start investing in crypto assets with as little as $10. You can use this platform to buy and sell more than 65 cryptocurrencies. Kraken empowers investors by helping them chart their own financial courses.
Buy, sell, and invest cryptocurrencies on Coinbase. It is one of the top crypto exchanges in the world – supporting over 100 countries. It has diverse features for you to easily start trading and investing. You can convert fiat money to Bitcoin or any other cryptocurrency quickly on Coinbase.
You can earn up to 8.05% interest on Gemini when you use Gemini Earn to invest in cryptocurrencies and stablecoins. Gemini is a popular cryptocurrency exchange for buying, selling, storing, and investing in Bitcoin and other cryptocurrencies. Currently, if you reside in the United States, you will get $7 in Ethereum when you sign up for an account with Gemini.
Choise.com is an ideal bank for crypto. It offers a free digital wallet for 20 cryptocurrencies. It allows you to use your bank card to buy Bitcoin, Ethereum, and other tokens. It also lets you earn interest on your investment. You can get up to 15.6% interest (that is, Annual Percentage Rate, APR) when you register for a high-yield savings account with Choise.com.
If you are looking for a single platform that can allow you to exchange banknotes and cryptocurrencies, process payments, and protect your long-term investments against fraud, look no further than Mercuryo. Furthermore, you can use its multicurrency wallet to buy, sell, spend, and hold many coins.
Tips for Long-term Investing
Successful investment is easier said than achieved. But if you use the following tips, you stand a high chance of succeeding with your long-term investments:
- Set your goals for undertaking long-term investing – to fund your education, retirement, or any other project.
- Know how much you can invest for a long time without needing to pull out your money any soon.
- Know how long you can wait before you will need to use the money you want to put into a long-term investment.
- Know the risks in different assets (or types of investments) before you invest in them.
- Diversify your investments by buying assets that are not highly correlated so that they will not all be adversely affected by unhealthy market conditions.
- Mind the costs of your investments so that you can keep the fees and other related expenses profitably low.
- Review your strategy periodically to ascertain whether you need to make some adjustments to keep your investments performing as expected.
Long-term investing is profitable for investors who know what they want from investing and have the right information that is likely to help them succeed. In this article, we have informed you about the benefits of long-term investing and the best digital tools you can use to pursue your long-term investment goals. We hope that you would put this knowledge to good use and earn a lot of money from your investments.
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