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What is the Meaning of Long Term Investments?
Long term investment plans are investment options designed to generate reasonable returns over a long period or have a maturity period of over three years for investments other than stocks or mutual funds, and over one year for stocks or mutual funds.
These investments offer several benefits, including the potential for higher returns, the ability to compound dividends and multiply gains, and the flexibility to correct mistakes without suffering a significant financial loss .There are various long term investment plans available in India, including:
Are You Looking for Short Term Investment Plans
- Public Provident Fund (PPF): PPF is a government-backed savings scheme with a long-term investment horizon of 15 years. It offers tax benefits and guaranteed returns, making it a popular long-term investment option for low-risk investors.
- Mutual Funds: Mutual funds are investment vehicles that pool money from investors to invest in a diversified portfolio of stocks, bonds, and other assets. They offer the potential for higher returns than traditional savings accounts and can be a good long term investment option for investors willing to take on some risk
- Stocks: Investing in stocks can offer high returns, but they come with a higher level of risk. However, if you hold on to stocks for a long period of time, it can help you make a neat profit at the end of the period.
- Fixed Deposits (FDs): FDs are a favorable long-term investment option for many because of their security. Since an FD is not dependent on market fluctuations, it offers assured returns. While fixed deposits are of two types—bank FD and company FD—the latter offers a much higher rate of interest
- Unit Linked Insurance Plans (ULIPs): ULIPs are investment-cum-insurance plans that offer the dual benefit of investment and insurance. They invest in a mix of equity and debt instruments, offering the potential for higher returns than traditional insurance policies
- National Pension Scheme (NPS): NPS is a government-backed pension scheme that invests in a mix of equity, debt, and government securities. It offers tax benefits and is a good long-term investment option for investors looking to build a retirement corpus
- Real Estate: Investing in real estate can offer high returns, but it requires a significant amount of capital and can be illiquid. However, real estate can be a good long-term investment option for investors willing to take on some risk.
- Gold: Investing in gold ranks among India’s top-performing long term investment plans, known for its potential for robust returns. Allocating funds into gold or other valuable metals serves as a safeguard against the eroding effects of inflation and the uncertainties of the financial market.
When choosing long term investment plans, investors should consider their financial goals, risk tolerance, and investment horizon. It is advisable to diversify investments across different asset classes to reduce risk and optimize returns
Comparison of Different Long term Investment Plans in India
Which is the best long term investment in India or long term investment opportunities? Where should I invest my money? The following are some of the best ways to invest money in India.
| Investment Option | Risk Level | Potential Returns | Liquidity | Suitable for |
| Fixed Deposits (FDs) | Low | 4%-8% | Varies depending on the terms | Conservative investors looking for capital preservation and regular income |
| Public Provident Fund (PPF) | Low to Moderate | 7.1% | Low (lock-in period of 15 years) | Individuals seeking tax-efficient, long term investments |
| ULIPs | Medium to High | 12 percent | Moderate (5 years) | Individuals looking for insurance coverage along with investment opportunities. |
| Mutual Funds | Varies (based on fund type) | 6%-9% | Moderate to High (depending on fund type) | Investors seeking professional management and potential for higher returns |
| National Pension System (NPS) | Moderate | 8%-10% | Low to Medium (withdrawal restrictions apply) | Individuals planning for long term retirement |
| Stocks | High | 6.6% | High (can be bought and sold on stock exchanges) | Investors with a higher risk appetite and a long term investment horizon |
| Equity Funds | High | 5 to 15 percent | Moderate to high | Investors seeking long term capital appreciation are willing to tolerate moderate to high risk. |
| Real Estate | Moderate to high | 10 percent | Moderate to high | Best for individuals seeking passive income |
| Gold | Moderate | 12% | Moderate (depending on form of investment) | Individuals seeking a hedge against inflation and currency fluctuations |
Why Opt for Long Term Investments?
- In contrast to short term investment strategies aimed at capital preservation, long term investments are designed to foster wealth creation.
- They involve constructing an investment portfolio that generates income over an extended period, serving purposes such as retirement planning or achieving long term financial objectives. Accumulating wealth becomes crucial to ensure a comfortable future, sustaining the income levels required.
- Nevertheless, long term investments entail a degree of risk, often encompassing equity investments, ULIPs, and similar options. While riskier, these investments offer an opportunity to recover from market fluctuations over the extended holding period.
- While they may experience downturns of up to 20% in the short term, they can potentially yield double-digit returns over a 10 to 20-year horizon. On the other hand, assets with lower risk provide more predictable but slower returns.
- Hence, when contemplating long term goals, it’s essential to weather short term fluctuations for the sake of achieving desired returns.
Common Long term Investment Plans Financial Objectives
Investing for the long term serves various purposes, including:
- Funding Children’s Marriages
- Financing Higher Education for Children
- Purchasing Property or Land
- Planning for Retirement
One significant advantage of long term investment plans is that they enable you to cover future expenses with accumulated funds, often with tax-saving benefits. However, in some cases, returns may become taxable beyond a certain threshold. Additionally, if you resort to loans to meet long term goals, you may incur interest charges typically ranging from 8 to 10%.
Curious about the best long term investment plans for 2024 or the best long term investment options? Below, we highlight some top choices:
- In the quest for financial security and wealth accumulation, choosing the right long term investment plans is paramount. India offers a diverse range of investment options that cater to the needs of those who seek to grow their wealth steadily over an extended period.
- Whether you’re planning for retirement, your child’s education, or simply looking to build a financial cushion for the future, understanding the best long term investment plans in India is essential.
- In this guide, we will explore some of the top investment avenues that can help you achieve your long term financial goals while navigating the intricacies of the Indian investment landscape.
- However, if you are seeking the best short term investment plans with high returns in India, especially in the realm of fixed income, consider exploring the real estate market. One particularly enticing option within this domain is structured debt investments, with a specific focus on the commercial real estate sector.
- These structured debt investments in real estate entail customized financing solutions tailored to suit commercial real estate projects. They present investors with the prospect of potentially securing attractive returns and regular income streams.
- What’s notable is that entry into this investment avenue is accessible with a relatively modest initial investment of 10 lakhs, and it holds the potential to yield returns ranging from 12 to 20%. These investment opportunities are made available through well-established alternative investment platforms like Assetmonk.
Bottom Line
You have the option to allocate your funds to any of the previously mentioned best long term investment plans or schemes to facilitate long term wealth accumulation. However, before embarking on your investment journey, it is crucial to seek guidance from a financial advisor who can assist you in managing your financial portfolio effectively.
You can explore online resources, analyze market data, review historical performance, and even delve into the experiences of fellow investors to arrive at well-informed investment decisions. This approach will empower you to make prudent investments that align with your predefined financial objectives and pave the way for achieving them.
Assetmonk distinguishes itself as an outstanding alternative investment platform in India, presenting a diverse range of appealing options for astute investors. Within these opportunities, individuals can delve into the domain of structured debt investments within the commercial real estate sector and a carefully curated assortment of alternative investment selections.
Assetmonk offers exclusive and customized investment possibilities to its esteemed clientele, with a minimum investment requirement of 10 lakhs and a guaranteed Internal Rate of Return (IRR) of 17 percent.
Related Articles
- Best Short Term Investments With Higher Returns
- Structured Debt Backed by Real Estate vs. Debt Mutual Funds: Exploring Risk and Yield Potential
- Best Investment Options in India to get Higher Returns
FAQs
Q1. What are Long term investments?
A. long term investments are financial assets that individuals or organizations acquire with the intention of holding them for an extended period, typically several years or even decades. The primary objective of long term investments is to build wealth, generate income, or achieve specific financial goals over time.
Q2. What are some of the best Long term investment plans in India?
A. Some of the best long term investment plans in India are real estate, gold, EPF, PPF, and NPS.
Q3. What should I invest in for Long term gain?
A. You can invest in ULIPs, stocks, real estate, PPF, and EPF for long term gains.
Q4. What makes a good Long term investment?
A. A good long term investment typically possesses several key attributes. It should offer the potential for capital appreciation over time, be aligned with one’s financial goals, and provide diversification to spread risk. Additionally, a good long term investment often offers some form of income generation and demonstrates resilience in the face of market fluctuations.
