The stock market has been quite the roller coaster ride for investors over the last few years. We have seen the economy go from a booming, healthy status, to a plunging death ride to hell for many investors. Covid 19 brought uncertainty and instability to many investors, and that instability has led to a gloomy outlook for many portfolios.
However, the future does not have to be all doom and gloom if you invest your money wisely. Choosing areas of investment that revolve around staple necessities is one way to negate the instability in the market and create a plan for long term success. These sectors are a good place to start if you are looking to make a long term investment plan that pays off.
Energy Is King
No matter what the world market is doing, it seems energy stocks tend to continue to turn a profit. Yes, the prices of oil fluctuate up and down, but over the long term the prices have continued to grow. Inflation has driven the cost of oil on a long term rise for more than 30 years. In that time we have seen large dips in the cost of crude oil, but those dips have quickly stabilized and returned to a steady climb.
Energy is not so much a get rich quick scheme, as it is a long term investment that can help your portfolio earn a steady income. Even with the push for green energy and electric vehicles, especially in the United States, oil stocks continue to perform. Until these forms of energy are perfected, oil will continue to be the number one provider of energy for the world. Putting your money into the energy sector gives you the ability to invest in something that literally every country in the world is dependent upon to function on a daily basis.
Healthcare Is A Healthy Sector
Covid 19 brought instability to many portfolios, but it also brought great wealth to a few savvy investors. Shareholders in Pfizer Inc. (NYSE:PFE) saw massive profits as the company was contracted to produce large quantities of vaccines to help deal with the spread of the pandemic. Those lucky investors who had been deeply invested in the company and others like it found themselves suddenly looking at massive profits and returns.
The healthcare sector is another area that the world depends on in order to function on a daily basis. Investing in companies that manufacture the medications that are used to treat common illnesses is another great way to bring stability to your portfolio. While investing is always a risk, making wise choices and investing in necessary product manufacturers can help negate some of that risk. This means that your investment is a safer choice than the more high risk sectors, leaving you a better chance of earning a profit over the long term.
Big Tech Offers Long Term Returns
Investing in tech companies can be risky. However, some of the more established companies are an almost guaranteed money making investment over the long term. Apple Inc. (Nasdaq:AAPL)
, Alphabet Inc. (Nasdaq:GOOG), and Meta Platforms Inc. (Nasdaq:META) companies that are here to stay. Consumers like their products and the companies have consistently returned profits for their investors for over a decade.
This proven track record of success is a good indicator that these companies offer a solid return on an investment. Again, they manufacture products that the world depends on in order to function. This means you are building a solid investment in an established company that already has a market share carved out for itself. This is the kind of stability that is desirable in a long term investment strategy.
Limit Risk
The truth is we all want investments that are a "sure thing." However, as anyone who has ever watched Jimmy Cagney in The Lemon Drop Kid knows, a sure thing is never really sure. Investments sometimes go completely sideways. Deals that are supposed to be worth billions do not always play out the way investors believe they will. However, that does not mean we should stop investing altogether.
Investing is never risk free. However, it also doesn't have to be a crap shoot based on gut instincts. Do your research, and make some calls to investment strategists. Read articles like this one that help you make wise decisions when investing your money. By carefully selecting sectors and products that limit your risk you increase your ability to make a profit on the money you invest. Choosing sectors like the ones above, which manufacture items needed for everyday life, you make investments that bring stability and longevity to your portfolio. These are the best kinds of investments anyone can make.
