8 Best Long Term Investment Options For Salaried Individuals

Updated: Thursday, August 25, 2016, 15:12 [IST]

Any investment of more than 5 years is considered as long term investment. Long term investment can be either used for kids education or as a retirement fund. Salaried individuals should make sure they have made enough investments to lead a financially healthy life. Those in the private sector, should save even more as they have no security of a pension.

One should make sure that they are aware of risk and returns associated with the investment they are making.

Any short term investment can be a risky thing as there will be less time for the investment to grow and volatility may ruin your investment.

As per investment advisers, one should not make an investment in only one sector or any one financial product. There is no perfect financial plan as it varies with individuals income and risk capacity.

An investor should make sure that they have considered all the avenues and spread their investment in such a way that they minimize their risk and increase their return.
Here are 8 best long term investment options:

Real Estate Investment

Investment in property or land can be one of the best options as it will give you returns by way of appreciation or as a rental income. If one has availed home loan, it can be a dual advantage as it will help an individual to save tax on interest income and the principal amount.

Investment in equities

Most of the individuals find it a risky bet. If one is looking for higher returns over the long term one can consider investing in the stock market. However, to reduce risk, buy blue-chip stocks or invest in a different sector to reduce risk exposure.

Investment in Mutual Funds

There are a variety of mutual fund options which one can consider depending on the risk and return. One of the best ways to invest in mutual funds is through Systematic investment Plans where one can invest small amounts every month to build a corpus over time.

Investment in Bonds

Bonds can be the best investment for individuals who are falling in the higher tax bracket as it will give better returns when compared to bank fixed deposits.

Invest in Public Provident Fund

One of the most popular investments in India is Public Provident Fund, where the investment made and returns are tax-free in hands of the investor.

Investment in Gold

Gold may occasionally lose its sheen, but is excellent for diversification purposes. There is no harm in holding a certain amount of investment in gold. There are various forms to make an investment in gold such as Gold ETFs, Gold Bonds etc.

Investment in IPOs

Initial Public Offerings have done pretty well in the last 1 year. The returns can be attractive if invested in a reputed company.

ULIPs

Unit Linked Insurance Plans can be one of the best investments as it takes care of insurance and has investment as well. As these invests in asset markets such as equities and debt there can be fluctuation in returns.

Conclusion

However, these financial products have given better returns in previous years but the future performance will depend on the market and other things. So invest in such a way that any drop in one investment should not affect your portfolio.