Investments can be broadly classified into short-term and long-term. Short-term investors look for quick gains, and try to benefit from the slightest fluctuation in the stock market. On the other hand, investors with a long-term outlook look for consistent yearly/bi-yearly returns. ‘Returns’ is undoubtedly an important criteria to choose an investment avenue. It determines the investment strategy, and for most investors, it is one of the most important criteria for selecting an asset.

When it comes to investments, a ‘one shoe fits all’ strategy doesn’t always work. A lot of factors have to be taken into consideration for determining which investment strategy will be best suited for an individual. Before planning an investment, it is advisable to consider the following factors:

1. Age
2. Financial Goals
3. Risk Appetite: High/Moderate/Low
4. Investment Amount

Before we go ahead and look at the best long-term investment options, it is important to understand the ideal investment strategies across various age-groups.

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Individuals who have no prior experience in investments should look at low-risk sectors, such as municipal bonds and mutual funds. The priority should be to get decent annual returns, without taking too many risks. Investment in blue chip stocks can also be beneficial for long-term. A systematic, planned, and regular investment, using Systematic Investment Plan (SIP) offered by mutual fund groups is another option for investors within this age group. SIP enables investors to put in lesser amounts into a combination of stocks. Another sector that young investors can consider is investing in gold and silver (coins, bars, etc.), or gold exchange-traded funds (ETF). Staying invested for 10 — 15 years in these assets can offer decent returns.

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When responsibilities and financial needs increase, the investment strategy should be modified in such a way that the financial obligations can be taken care of. A combination of mid cap and large cap stocks will serve the objectives of investors within this age group. Portfolios that follow a moderate allocation between equity and fixed-income securities are a safe bet. Corporate debt is another long-term investment suitable for investors in this group. Investors can also consider having gold and silver exchange-traded funds in their portfolio.

Age Rule

If age = x years

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Most investors within this age group have an objective of earning good annual returns to save for retirement, or other liabilities. The focus should be on large cap stocks that ensure stable returns. Systematic Withdrawal Plans (SWP) offered by mutual fund companies are a good option for achieving regular income. These plans enable investors to contribute a large amount of capital at one time so that they can reap the benefits at regular intervals.

Today, there are so many mutual funds in the market that an average investor is spoiled for choice, and picking a good mutual fund is a tedious task. We have picked up some mutual funds for you which were in the pick-list of many esteemed fund managers and financial gurus. You can check the previous record of these mutual funds in the table below along with the yearly returns they have offered.

Vanguard Energy Inv (VGENX)