A long-term investment can be defined as an account of the complete assets of a company that is held for a duration longer than one year. They have a distinguished advantage over short term investment with respect that long term investments may never be sold whereas short term investments will most likely be sold. Apart from this, long- term investments offer you several other advantages. Just like fixed deposits in bank, long- term investments help you to compound interest.
The biggest reason for equity investments done only for a longer duration is volatility. At present the BSE Sensex gives a return rate of 12.77% per annum. This gives a fairly good idea as to why one should incline towards equity investments. However just like everything there are pros and cons to everything. The returns of such investment are high, but the variability quotient is also high to an extent that during any particular short period one could face bad returns or may incur losses as well.
There are a number of options that one can opt for in long- term investment. If you have huge amount of cash then investment in real estate can be the best choice.
