What is your long term investment

Long-term investment: opportunities for private investors

Valeria Nickel, April 30, 2021

Many private investors are looking for a way to make provisions for later life. Some rely on their own property, others on pure capital investments. You are spoiled for choice, because there are countless types of investment. It is important that you invest equally in short, medium and long-term products.

As a rule, however, you get the highest return with long-term investments. The following principle applies especially to fixed-income investments: The longer the term, the higher the interest rate. So if you can do without your money for a longer period of time, you should definitely use long-term investments.

What are long-term investments?

As a long-term investment opportunities with a Term of over five years designated. This means that the money is fixed for this time, so it is not available to the investor.

You don't have capital that you can invest over the long term? Use savings plans for long-term wealth accumulation.

What is the best long-term investment?

Savings bonds, fixed-income securities such as bonds, equity funds, closed-end funds and life insurances are suitable for long-term investments.

Savings bonds

In the case of savings bonds, the money is invested with a bank or savings bank for a fixed period of time, which is usually between five and ten years. This form is low-risk, but currently brings almost no interest and therefore no return.


An alternative with higher earnings prospects are fixed-income securities such as bonds. They can have very different terms and are therefore also suitable as long-term investments if they are appropriately structured.

Equity funds

Equity funds involve a slightly higher risk, but it is calculable. Here the investor invests in a "basket" of shares. You can determine the risk-return ratio of the fund individually according to your own preferences and choose a good mix of high-risk and safer stocks.

Another advantage is that you can also work with a monthly deposit, i.e. you can steadily increase your invested capital over a long period of time.

However, the systems mentioned often have a term of less than ten years. This looks like a long time - but if you don't need the invested money for 20 or even 30 years, it can be a nuisance to shift it in between.

Endowment life insurance

One possibility to get around this is the classic life insurance. Although it is only offered with lousy guaranteed interest rates, the decisive option for the investor is to give the insurance company a one-off capital and only get it in 20 years along with interest to get back.

Closed funds

Even closed-end funds often have an above-average investment period of over ten years - usually 25 years. However, they carry a very high risk, and in the worst case scenario it can lead to a total loss. Hence, they are not recommended for the purposes of most consumers.

Long term does not guarantee security

Danger: The long investment period alone is no guarantee of a positive return at the end of the term. Of course, some forms of investment are better protected than others. However, especially with stocks (funds), one should bear in mind that not always a great return beckons.


who 1980 bought one share each of all companies represented in the Dax and sold it again in 1995, achieved an average return of 12% per year. Investors were even more lucky 1995 got into the stock market: you received 23.3% return within five years. Against this made one in the year 2000 created Dax deposit ten years later a loss of -0.7% on average per year. With one entry in the year 1999 the loss level even climbed to -1.5% within ten years.

A long investment horizon pays off with stocks

So the idea that “if you have staying power, you can increase your wealth with stocks” is not always one hundred percent true. The entry and exit times involve massive differences. Is one flexible and if the price has just fallen, the term can simply be extended by a few years, but then an equity strategy can be quite attractive.

Tip: Spread your capital investment across different asset classes! The overall risk can be significantly reduced through diversification.

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