People get into investing for many different reasons. Some of them are just hoping for quick profits but for others, it’s about the long term. You could be building a fund for retirement, making sure your children or grandchildren get a good education or you are aiming to set up a lasting family legacy. Investing with goals like this in mind requires a different strategy from that of the average investor but it’s a low-risk approach and it can pay off very well indeed.
Property and retirement planning
By the time they come to think about investing, most people already have one substantial investment – the home they live in. That home, however, isn’t always somewhere where they want to remain when they get old. Most people don’t need as much space in later life and find it hard to look after a large house. It can also be much easier to live somewhere without stairs. Planning for that makes it possible to find a suitable later life home at a good price and to rent it out until you’re ready to use it, paying off any mortgage in the process. In the meantime, you can invest in improving your current property so that you can get a better price for it when you come to sell. This may not be the kind of thing that springs to mind when you think about investment but it’s a good example of what all investment is really about – thinking ahead and giving yourself the flexibility to make your moves at the best possible time.
If you’re looking to purchase other kinds of assets with a view to the future, you should be looking to take advantage of the lower price to gain ratio attached to most slow-ripening assets. The most obvious choices in this situation are government bonds or ISA’s, which come with attractive tax incentives, but you can also find stocks with very good long-term potential. A good place to focus is on medium-sized businesses which have proven their ability to survive, have gained a good measure of stability and are slowly expanding. Look for companies that don’t take big risks but instead focus on internal reinvestment and steadily increasing their market share. Spread your money across several different companies to reduce your risks. You may also want to consider investing in multiple sectors (three is ideal, as you can still learn and understand the market in each case), or even in different global economic regions. This helps to protect you from large scale economic upsets.
Brokers as managers
If all this feels too complicated and you’re not confident that you can do a good job, you may want to find a broker who can provide advice on your investment choices. This list of good forex brokers is a good place to start because forex can be useful for hedging to reduce the risk associated with setting up some other kinds of asset transfer. Brokers have increasingly been moving into this area and can provide more affordable support than traditional investment managers while making it easier for you to directly explore the performance of the assets they recommend.
Leaving a legacy
One of the advantages of having a broker look after your investments is that it makes it easier to keep everything running smoothly when you die. While there will be tax implications associated with your passing, a good broker will be able to advise on ways to reduce the impact of this so you can set up funds that will continue to provide for your dependents. A well-structured fund like this can help to support your descendants for generations, continuing to grow decade by decade if revenues are reinvested.
A bigger future
When you think about the future, you may well be thinking beyond your own family. What about the future of the planet? There are ways that you can use investing to act in this area as well. Green investing is an increasingly popular option, with pre-structured share packages making it easy to make positive, ethical choices. Depending on your areas of expertise, you could choose to focus on renewable energy production, infrastructure or innovation, with interesting options across a broad range of fields. Well-chosen investments of this sort mean that you can help to create a better future for everyone while increasing your wealth at the same time.
A well planned long-term investment strategy is the single most reliable way to make money through trading, so if you’re not worried about short-term gain but want to focus firmly on the future, you could do very well indeed.