There are many different types of investors in the world, from those who look to leverage market volatility and pursue short-term gains to others who want to create a sustainable source of wealth for the future.
This is where a long-term investment plans come into play, as this will feature a diverse range of assets that an individual will want to hold for at least a year as a way of steadily accumulating wealth.
Top 3 long term investment Plans for entrepreneurs
This is a key weapon in the typical entrepreneur’s toolbox, especially if they intend to sustain their business over an extended period of time. So, here are some of the best long-term investment plans for entrepreneurs in 2021.
Growth Stocks
We’ll start with growth stocks, which can be traded individually or as part of actively managed funds that include a diverse array of options.
Often characterized by tech companies in the modern age, growth stocks are relatively young and startup ventures that typically plow all of their profits back into the venture, rarely paying out dividends until they’ve matured.
So, although growth’s stocks are risky as their price is inflated in relation to their real-time earnings, they have exponential growth potential and often evolve into the best equity performers over time.
Managed funds are definitely the way to go when targeting growth stocks, as they enable you to tap into existing investor expertise and high-value growth shares that help you to turn the delicate balance between risk and reward in your favor.
Stock Funds
If you have a slightly low level of risk tolerance and simply don’t have the time to analyse the performance of individual stocks, you’d be better served by targeting stock funds.
This may take the form of an ETF (exchange-traded fund) or a mutual fund, with broadly diversified options such as the S&P 500 index particularly effective options. The reason for this is simple; as they offer access to high-growth stocks across a broad range of marketplaces and industries.
This also helps with the process of diversifying your interests naturally and minimizing your exposure as an investor, without having to compromise on your risk outlook or underlying trading methodology.
A stock fund is also an excellent choice for any investor who wants to adopt a more aggressive approach, but simply lacks the time or expertise to do this as an individual.
Bond Funds
We’ll close with what’s arguably the quintessential long-term investment plan, with a bond fund (such as a mutual or an ETF) typically containing assets from a variety of issuers at corporate or governmental level.
Bonds are usually characterized by their inherent type, and whether they’ve been issued by a corporation, municipality or federal government. Other factors, such as a bond’s duration and risk-level should be considered by investors, so there’s certainly plenty of choice in the current marketplace.
Government-issued bonds are thought to be the most secure, while they also deliver a reliable return once they’ve matured.
More specifically, when this type of bond is issued, the government in question agrees to pay its owner a set amount of interest annually. At the end of the bond’s term, the issuer simply repays the principal value of the bond before it’s redeemed.
This is definitely a good option for risk-averse entrepreneurs, who are more concerned with minimizing risk rather than chasing inflated returns.
