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. 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. 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. 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. For the past twenty years, mutual funds have been perceived as one of those long-term investment options, which provide better returns than Federal and State bonds. However, you should remember that not all mutual funds perform consistently, and there is still a bit of risk involved. People with low-capital investment make the mistake of spreading themselves too thin in a mutual fund. This results into low returns as the gains are not significant. However it has to be said that overall, mutual funds are one of the preferred modes of investment as an investor feels secure that his money is handled by qualified professionals. Also, over the years, several mutual funds have been able to generate higher returns than the stock market. 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.

Year*	Value	Change %
2000	24.55	-
2001	27.42	10.46
2002	27.98	2.00
2003	23.43	-19.42
2004	31.82	26.37
2005	45.67	43.50
2006	62.37	36.60
2007	65.41	4.90
2008	75.81	15.90
2009	41.83	-44.80
2010	59.37	41.90
2011	74.26	25.10
2012	61.56	-17.10

(*2000 has been considered as the benchmark. Values are as on the first trading day of March each year.) % change in the period 2000 - 2012 = 150.8% If you would have invested $10,000 in 2000, you would now have $25,070

Year	Value	Change %
2000	16.58	-
2001	13.22	-20.30
2002	14.08	6.50
2003	10.24	-27.30
2004	18.50	80.70
2005	24.73	33.70
2006	43.56	76.10
2007	57.03	30.90
2008	62.80	10.10
2009	30.38	-51.60
2010	64.13	111.10
2011	73.30	14.30
2012	64.40	12.10

(*2000 has been set as the benchmark. Values are as on the first trading day of March each year.) % change in the period 2000 - 2012 = 288.40% If you would have invested $10,000 in 2000, you would now have $38,840

Year	Value	Change %
2000	34.07	-
2001	47.12	38.30
2002	51.24	8.70
2003	41.94	-18.10
2004	58.74	40.10
2005	59.90	2.00
2006	68.34	14.1
2007	69.67	1.90
2008	52.16	-25.10
2009	26.95	-48.30
2010	45.01	67.00
2011	49.08	9.00
2012	48.83	-0.50

(*2000 has been set as the benchmark. Values are as on the first trading day of March each year.) % change in the period 2000 - 2012 = 43.30% If you would have invested $10,000 in 2000, you would now have $14,330

Year	Value	Change %
2000	16.46	-
2001	18.51	12.50
2002	21.91	18.40
2003	19.00	-13.3
2004	27.22	43.30
2005	30.67	12.70
2006	36.18	18.00
2007	35.02	-3.20
2008	32.96	-5.90
2009	19.45	-41.00
2010	28.76	47.90
2011	36.30	26.20
2012	35.31	-2.70

(*2000 has been set as the benchmark. Values are as on the first trading day of March each year.) % change in the period 2000 - 2012 = 114.50% If you would have invested $10,000 in 2000, you would now have $21,450

Year	Value	Change %
2000	30.53	-
2001	38.40	25.80
2002	28.20	-26.60
2003	18.85	-33.20
2004	30.59	62.30
2005	33.48	9.40
2006	63.73	90.40
2007	63.49	-0.40
2008	75.40	18.80
2009	40.81	-45.90
2010	63.46	55.50
2011	88.99	40.20
2012	70.14	-21.20

(*2000 has been set as the benchmark. Values are as on the first trading day of January each year.) % change in the period 2000 - 2012 = 129.70% If you would have invested $10,000 in 2000, you would now have $22,974 Precious metals have always been one of the favorites among investors. Gold, particularly has been used as a hedge against inflation, and also as an asset to diversify the portfolio. When stocks market all over the world took a hit during the sub-prime crisis, gold continued to grow at the rate of 25%. The demand for gold is expected to grow in future as many emerging economies, such as China and India import gold heavily. Gold has the reputation of offering great returns every year and the trend is expected to continue in future as well. The table below will give you an idea about the gold prices over the years.

Year	Average Price	Change %
2000	279.11	0.04
2001	271.04	-2.89
2002	309.73	14.27
2003	363.38	17.32
2004	409.72	12.75
2005	444.74	8.55
2006	603.46	35.69
2007	695.39	15.23
2008	871.96	25.39
2009	972.35	25.90
2010	1,224.53	28.30
2011	1,571.52	22.10
2012	1,675.30	6.60

% change in the period 2000 - 2012 = 500.20% If you would have invested $10,000 in 2000, you would now have $60,022 With over 10,000 public companies in the US, it becomes difficult for a long-term investor to pick one stock and remain invested in it for a long time. It is because of this reason that most fund managers look at stocks in reputed indexes for a long-term approach. The stocks listed on Dow Jones Industrial Average, The Standard & Poor's 500 Index, and The Nasdaq Composite Index, are of some of the most trusted companies in the US. These stocks have a history of offering decent returns to investors who are in for a long-term. The Dow Jones Industrial Average contains 30 of the most popular blue chips stocks. Although the options are limited for investors, the 30 stocks are some of the best performers in the market. The Standard & Poor's 500 Index hosts 500 stocks, and covers all major companies operating in various fields. The index is considered a good option for investors who want to diversify their portfolio. The Nasdaq Composite Index has gained its prominence as one of the best indexes around the world, largely because of the phenomenal growth in the IT sector. The index trades in some of the biggest and reputable IT companies in the world. Take a look at the below mentioned tables to get information on the performance of these indexes.

Year	Value	Change %
2000	1,320.28	-
2001	1,148.08	-13.04
2002	879.82	-23.37
2003	1,111.92	26.38
2004	1,211.92	8.99
2005	1,248.29	3.00
2006	1,418.30	13.62
2007	1,468.36	3.53
2008	903.25	-38.49
2009	1,115.10	23.45
2010	1,257.64	12.78
2011	1,257.60	Negligible
2012	1,426.19	13.41

Year	Value	Change %
2000	10,786.85	-
2001	10,021.50	-7.10
2002	8,341.63	-16.76
2003	10,453.92	25.32
2004	10,783.01	3.15
2005	10,717.50	-0.61
2006	12,463.15	16.29
2007	13,264.82	6.43
2008	8,776.39	-33.84
2009	10,428.05	18.82
2010	11,577.51	9.9
2011	12,217.56	5.53
2012	13,104.14	7.26

Year	Value	Change %
2000	2,470.52	-
2001	1,950.40	-21.05
2002	1,335.51	-31.53
2003	2,003.37	50.01
2004	2,175.44	8.59
2005	2,205.32	1.37
2006	2,415.29	9.52
2007	2,652.28	9.81
2008	1,577.03	-40.54
2009	2,269.15	43.89
2010	2,652.87	16.91
2011	2,605.15	-1.80
2012	3,019.51	15.91

(*For these three indexes, 2000 has been set as the benchmark. Values are as on the last trading day of December each year.) Inflation, the rise in prices, not only erodes purchasing power, but also erodes investments. In the long run, the investments must outperform the level of increase in prices. Therefore, it is essential to understand the inflation sensitivity of each investment. Ensure that the annual rate of return is higher than inflation rate. Equities and bonds are most affected by inflation. However, the right choice of local and global stocks can overcome the effect of local inflation. Investment in gold can act as a measure against inflation.

• Research: Before taking any decisions, it is important that you conduct a thorough research of the market. When indulging in stocks, be sure to evaluate the performance of the company and its prospects as well as the sector performance.
• Diversify: An ideal way to go about your investments is to diversify your portfolio and invest in a variety of financial instruments. Choose the investment option, or stocks investment in such a way that losses incurred by one can be compensated by the profits gained through the other.
• Reinvest: For a long-term investment success, it is important that you reinvest your earnings from dividends and interests. Even if the earnings from reinvested capital are small, in the long run it can amount to substantial capital.
• Invest Globally: According to the International Monetary Fund (IMF), emerging markets grow faster than developed economies. Moreover, the world market has approximately 50,000 stocks whereas only 10% of them are listed on the US exchange. Being so, it is advisable to invest in international stocks and ETFs. Try to invest in emerging markets like China, India, Thailand and Columbia. To reduce the risk, ensure that you invest only 10% of your total investments in such international investment avenues.
• Evaluate Tax Aspects: Ensure you understand how the investment will affect your tax payments, as per the tax laws of your state. Some investments might offer tax shelters whereas some might not.
• Consider Transaction Costs: While evaluating any investment option, remember to consider the transaction costs involved as well.

The essence of successful long-term investment is to clearly define your goals, or objectives and correctly identify your financial needs. Once you have a clear idea about this, you can choose the right set of assets to invest in and increase your wealth. Disclaimer: The information provided in this article is for informative purposes only and should not be substituted for the advice of an appropriate professional. We do not, in any way guarantee, or promise a particular result/outcome. Reader discretion is advised.