Do longer terms ensure better returns?

If an investor starts investing early and goes for a long term investment, then it’s a wonderful combination. When we talk of market-linked investments, then holding for longer periods does give an upper hand. Here we will discuss some of the leverages of long term investment along with examples.

Sensex was an all-time high in January 2019, and people who invested in stocks a decade ago when the markets crashed and held this long, reaped high profits. It’s quite clear that holding the pitch for long did bring the money back home with good profits. It can be put in a way that an investment is just a test match, longer you stay, the better it is.

Benefits of the long term investment

There are many benefits an investor gets if the money is invested for the long term. Some of the key benefits are

1. Less worry about the volatile market

2. Cost effective as it reduces commissions and other management costs

3. Power of compounding

4. Rupee Cost Averaging

Benefits of long term investment in the Indian economy

When we talk of long term investment, then the investor can consider a period of 7 to 10 years. It might help in:

1. Managing risks

2. Giving better returns

3. Developing the Habit of savings

Indian economy is at a booming stage and might soon touch the levels of American or European economies in times to come. So, to get good returns, invest for a long period, now.

Long term investment options

Investors can invest money in insurance products like ULIPs or any other investment plans offered by the insurance companies. If the investor is investing for the long term, then he/she can reap good profits. Investment advisors always suggest investing money for a longer period of time to gain high profits. If the investor chooses to invest in ULIPs, then he/she gets the dual benefit of life insurance and wealth creation for the future.

The power of compounding is magical in the long run. It must be clear why an investor should start saving early and hold the investments for the long term. Stop thinking, start investing!

ARN: ED/09/19/15840