Investment is a means that many people currently use to achieve financial security in old age or to retire early, so they do not have to keep working at an increasingly old age. Long-term investment can be an option for those seeking to achieve these financial objectives.
As the name implies, long-term investment is investing assets in certain instruments over a long period. The main objective is to gain profits in the future.
There are several specific objectives for people who invest long-term, including wedding expenses, retirement funds, emergency funds, educational expenses, and buying houses and vehicles. To enjoy the results, one who invests for the long term must be willing to accept the risk of fluctuating investment returns to obtain a large final result.
Then what are some examples of long-term investments that could be an option for those who wish to reap satisfying results in the future? Come and see the full list below!
- Gold
Gold can be a long-term investment option because it has many advantages, such as being more resistant to inflation risk, its price tending to be stable, not losing intrinsic value, and having a high level of liquidity.
However, there are also weaknesses or risks associated with this precious metal investment. For instance, the price increase is relatively slow, so the benefits of investing in gold will only be felt after a few years.
Furthermore, gold investment does not generate passive income unlike other investment instruments. Nonetheless, gold has proven to be resilient in times of economic recession. So, gold can be considered a fairly reliable long-term investment.
- Stocks
Have you ever heard of someone buying a product and saying they are also the “owner” of the company that produces it? Well, the person may be explaining that they bought the shares.
Stocks or shares are a sign of participation in a company’s funding. The potential profits gained are when the stock price rises (capital gain) and dividends are paid.
Investing in stocks is currently relatively easy because many applications provide a stock purchase feature with numerous choices. Even so, people who decide to invest in stocks should thoroughly research the company they choose and take the right momentum to enter the capital market.
So, even though it can generate large profits, it should be noted that the risk of stock investment is also high.
- Property
Property is also a good investment for investors with a conservative risk profile, just like gold. These people prefer stability and security over price increases.
Property investment is also one of the safest investments, and the price increase is vast due to high demand. The downside is that property is an asset with the highest liquidity risk because it tends to be difficult to sell.
- Bonds
Next are bonds, medium- and long-term promissory notes that can be traded. The advantage of this long-term investment comes in the form of interest (coupon) for a certain period.
The profits obtained tend to be stable compared to stocks. The government or companies issue bonds to finance a project.
Government bonds are in the form of Surat Utang Negara issued by the Indonesian government. The government issues bonds with a rate coupon (FR-Fixed Rate Series), bonds with variable coupons (VR-Variable Rate Series), and bonds with the sharia principle/Sukuk Negara.
On the other hand, corporate bonds are promissory notes issued by Indonesian companies like BUMN or other companies. It is the same type as government bonds.
Usually, bonds can be purchased through a digital investment application approved by Otoritas Jasa Keuangan (OJK) and Badan Pengawas Perdagangan Berjangka Komoditi (Bappebti).
- Deposit
A deposit is also considered a long-term investment that promises security and fixed profits. It is also easy to open an account. You only need to come to the bank to make a minimum deposit.
Generally, the deposit period starts at 1, 3, 6, and 12 to 24 months. Deposits are also guaranteed by the Lembaga Penjaminan Simpanan (LPS), so they are safe.
Funds that have been deposited can only be withdrawn after the due date. If taken earlier, the depositor will get a penalty.
Even though it is easy, the weakness of deposits is the small profit compared to other investments.
- Mutual fund
Then, there are also mutual funds, which are increasingly becoming a long-term investment choice, especially for the younger generation. Investors do not have to worry about stock performance with mutual funds because investment managers do the job.
Aside from that, the risk is also smaller, especially if investors diversify their investments. The liquidity is also high because investors can cash out their investments on every trading day according to the calendar of the Indonesia Stock Exchange.
Therefore, this investment has a weakness, namely the risk of decreasing unit value, which is influenced by developments in the money market and capital market, so that the value of the mutual fund per unit can also decrease and fluctuate. Another risk is mismanagement, namely when the investment managers are unsuccessful in managing their portfolios.
- Pension Fund
Lastly, there is the pension fund, usually taken from the employee’s salary. Employees can apply for their retirement funds even without submissions from the workplace.
In Indonesia, hundreds of pension fund management institutions exist, so people can freely choose which one suits them.
So those are some examples of long-term investments. Each has its strengths and weaknesses. Consider your risk profile and abilities before choosing.
