Global Strategy

Best long-term investment

 

The most profitable investment in the long term is in the stock market

It historically outperformed all other investments

Beyond real estate, and without all its constraints

 

You can get your money quickly if you want

 

It allows to diversify by sectors (industry, health, environment, telecom …)

by geographical zones

by types of assets (stocks, indexes, bonds, commodities …)

 

With the right portfolio there is almost nothing to do once it is created, 
only a few adjustments  once or twice a year

 

This chart compares the evolution of the  S&P500 index and the real estate, between 1987 and 2013, you clearly see in spite of the strong fluctuations, the performance of the stock market is clearly superior.

 These fluctuations can be neutralized and the curve can be smoothed as you will see later

This one compares the average returns of differents financial assets over a period of more than two centuries, stock market is, again, largely above.

 
You can do better than just follow the index
You can reduce risk and volatility in times of crash
Even in times of stock market crash, some portfolios were slightly positive, others held up very well
 
 
 
On the graph below, you can see the annual returns of two portfolios between 1999 and march 2020
 
Portfolio 1 is a diversified portfolio  
Portfolio 2 is only composed of US stocks
 
During the crises of 2000 and 2008
Portfolio 1 which is well diversified, was up 8% and 0,75%
Portfolio 2  100% stocks composed, at the same time  lost 20% and 37%,
 
 
You understand now the need to have a well diversified portfolio

.

Diversified portfolios with good allocation, helps managing risk and reducing volatility because they are composed of different assets such as indices, bonds, commodities … and these assets are not correlated
 

To capitalize to the maximum and benefit from compound interest, the ideal is to make this investment over a long period, several years or even decades

With a large capital, you can use these portfolios to generate good passive income

 

 
PERFORMANCE OF A 10-YEARS DIVERSIFIED PORTFOLIO (BETWEEN 2007 AND march 2020)
 

10,000$ invested in 2007,  in march 2020 worth is 27994$

 Now, same portfolio but this time you save 1000$ every year that you reinvest in this portfolio, gives a a worth of 52318$ in march 2020

 

 

By saving and reinvesting regularly on these portfolios, you can accelerate things strongly and the final capital can be really impressive

 

→ 3 DiversifieD portfolios ←