Why do long term investment only| Know the amazing benefits|

Long Term & Short Term

When it comes to investing, two options come to the fore. One long term investment and one short term investment. Today we will consider whether investing should be done long term or short term.

Why do we invest?

Why any investment is made? Every man has a goal. There is an M. Some want to make a fund for the higher education of the child, some want a big fund for the marriage of a girl, some want to buy a house, some want to secure their old age, some want to buy a car etc. Man invests for all these works. Now you can think that for all this work, not a small fund but a big fund is needed which is difficult to make in the short term. Hence long term investment is always advised.

What is Long Term Investment

Any investment made for the long term is always beneficial. Whether you invest in the stock market or mutual funds. Now the question arises that what is called long term. Many people consider time more than 3 years as long term. But 3 years time is not very beneficial in shares or mutual funds. I believe that if more than 20 years is called long term then it is better. If you give 25 years or 30 years, even better. One can make a great fund during this period.

Reduced risk in the long term

Why Invest Long Term? Because in the long term the risk is reduced. You should know that after 1980, I myself have seen the market crash many times. Have seen the market diving for several days. Thousands of crores of investors have been seen sinking in a single day. Now imagine what would have happened to the sort term investment. But even in this circumstance, there is no loss to the long term investor. On the contrary, there has been a gain of minimum 12 to 15 percent. There are many mutual funds which have given benefits ranging from 45 to 65 percent. The reason for this is that investment is made in rising market and investment is also done in falling market. Which maintains the average investment. remains average. And there is no significant effect of falling market. Then as soon as the market starts to rise, the fund value shows its brilliance and the growth of money increases.

More units in the long terms

The most important thing is that in long term investment, especially in shares or SIP, the number of units increases with each investment. And the amazing thing is that when the market is falling, when you are afraid of investing, then you get more units. In a down market, SIP or investing in shares gives you more units than you thought. Then when the market goes up these units give you amazing profit. Isn't it amazing?

advantage of compounding

In long term investment, you get the benefit of compounding. If you understand the power of compounding, then no one can stop you from making you rich. You can understand in this way what is the power of compounding. You have invested money somewhere. That's your principal. Whatever he earned from the principal amount became interest. Now again you put interest in investment. Now he is also giving you interest money by making money. That is, earning money even with interest money. If you maintain it long term, then the power of compounding can turn your less money into a bigger fun

25 to 30 years investment

Now you must have understood very well that the investment made in the long term instead of the short term is less profitable. You should always try to invest any amount in a good equity mutual fund for 25 to 30 years. You will see how miraculous the benefits you will get.

(This post has been written for information, you should do any investment only with the advice of your financial advisor.)

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