Best long-term investment
The most profitable investment in the long term is the stock market investment, and more specifically the stock market indices, it historically outperformed all other investments.
It goes well beyond real estate for example, and without all its constraints such as tenant management, fixing dammage…
This is not a substitute of real estate investment , because it also has a lot of advantages, but the stock market is a complement to consider.
One big advantage is that you can get your money quickly if you have an urgent need for cash, which is much more difficult when you’re only invested in real estate.
It allows to diversify your investments by sectors (industry, health, environment, telecom …), by geographical zones, by types of assets (stocks, indexes, bonds, commodities …).
Therefore the stock market is an essential element to take into account in the diversification of your investments.
Majority of people are afraid of the stock market because they do not understand how it works and are afraid because of the volatility, they think the stocks could quickly lose all their values, or disappear.
Of course this happens sometimes, so for better security we can invest in ETFs, which dilute the risk.
An Index never fall to 0!
These strong fluctuations can be neutralized and the curve can be smoothed as we will see later.
.How to control risk
As these assets are not correlated, this helps to reduce volatility, to control and minimize risk and losses, while achieving a return that is more correct over the long term (average historical yield between 5 and 10%).
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.
People who already have a large capital, can use these portfolios to generate good passive income.
Although it’s never too late, it’s best to start saving and investing as soon as possible. we can start investing with small amounts
PERFORMANCE OF A 10-YEARS DIVERSIFIED PORTFOLIO (BETWEEN 2007 AND 2017)
10,000$ invested in 2007, in 2017 the worth of portfolio is 23944$
By saving and reinvesting regularly on these portfolios, you can accelerate things strongly, and by multiplying these figures by 2, 3, 10 … the final capital can be really impressive.
You can find here the detail of 3 simple and strong portfolios