Options for long term investments

If you are looking for a long term way to invest your hard earned money, there are a number of different options available to you.Long term investments come in many different shapes and forms.You will want to consider supplementing your long term investment with short term investment options in order to provide money that is easily accessible in the case of an emergency.Talk to an investment professional about the best long term investment options for your particular monetary goals and investment philosophy.

Annuities
An annuity is essentially a contract between an insurance company and a client.An annuity can generally be deferred or immediate.If you choose an immediate annuity, you will be receiving your payout right when your first contribution is put into the annuity.If you choose a deferred annuity, then the payout will begin at a later date.

Fixed annuities
If you choose a fixed annuity, then you sign a contract with the insurance company which states that the insurance company will specify the rate of future interest and guarantee the principal that you put into the annuity.Then the insurance company chooses to invest that money into a combination of private loans, real estate, mortgages, long-term government bonds, and/or corporate bonds.This diversification into generally stable and long term investment options make a fixed annuity more stable than many other investment options.

There may be some variation in the interest rate when extended over the life of the annuity.This is because there might be growth from dividends.However, the overall changes in the interest rate will be minimal, especially when compared to different investment options, such as a Money Market Fund.

If you want a long term investment that guarantees a basically stable interest rate and doesn't put your savings in danger, then you will want to consider investing in fixed annuities.The income is guaranteed by the insurance company.Make sure that you only invest in fixed annuities that are provided by insurance companies that are rated A++ by A.M. Best Col, AAA from Duff and Phelps Credit Rating Co., Aaa from Moody's Investors Service, or an AAA from Standard and Poor's.

Annuities also provide tax-deferred growth that is an advantage for many different investors.The payout of a fixed annuity will be a steady income throughout the life of the annuity.You can also choose to invest in a variable annuity, or a combination annuity.You will have to pay income taxes on your annuity upon payout.Also, if you withdraw money before you are 59 ½, then you may have to pay a 10% federal tax penalty.

Variable annuities
Variable annuities are a good investment if you are looking to protect your investments against inflation.Variable annuities have the potential to grow faster than inflation does, as long as the securities market is performing well.However, you must keep in mind that the value of your investment will vary over time.You choose where you want your investments to go within the insurance company's separate subaccounts. You purchase what are known as units of interest in a subaccount investment portfolio.You can also choose between bonds, stocks, and fixed-interest rate investments, depending on your investment strategy, personality, and long-term monetary goals and needs.

Bond funds
Bond funds are another option for long term investment.Bond funds can provide you with a higher current income than is possible from growth stock funds or money market funds.You can also choose whether or not you want to aggressively invest in higher risk income funds, which have a higher potential for price risk.If you are comfortable with some price fluctuations, but you want a higher income than is possible through money market fund investment, then you will want to investigate investing in bond funds.