<?xml version="1.0" encoding="UTF-8"?>				<article id="-341356740"><artname>Investments Best Suited for Long-Term Investing</artname><image file="883552_ec.jpg" align="left" alt="Photo of the Open Road" /><p><glossary def="Usually longer than one year, often in reference to loans, bond maturities, or capital gains." primary="Long-Term">Long-term</glossary> investors seek to build <glossary def="The total investments of an individual or company." primary="Portfolio">portfolios</glossary> that <nodef>will</nodef> gain maximum value over time. Certain kinds of <glossary def="The purchase of a potentially appreciable asset such as a stock, a bond, a property, or a unit of production. The purchase provides funds for the growth of businesses and governments." primary="Investment">investments</glossary> are particularly well suited to helping investors take advantage of long-term <glossary def="Gains in value. In business, growth is measured by the expansion of assets and sales. In securities, it refers to the increase in market prices." primary="Growth">growth</glossary> trends.</p><p><glossary def="A stock within a rapidly growing industry, or with earnings that grow faster than the average of other stocks within that industry." primary="Growth Stock">Growth stocks</glossary> are <glossary def="Portion of a company's capital owned by a party and represented by the number of shares possessed. Stock represents equity in a company. There are many types of stock--for example, blue-chip, common, preferred, and growth." primary="Stock">stocks</glossary> from companies with a strong potential for <nodef>future</nodef> growth. The <glossary def="The net income of a business, investment, or individual over a specific period, such as a quarter-year. " primary="Earnings">earnings</glossary> of growth stocks are expected to grow faster than the <glossary def="An average of prices for a specific group of stocks. Typically, a compiler of an average will add the prices of the stocks and divide this total by the number of stocks. The resulting average is used to measure market conditions. The most well-known market average is the Dow Jones Industrial Average." primary="Market Average">market average</glossary>. More <glossary def="The degree to which an investment's price fluctuates. The more it fluctuates, the greater the volatility of the security. Almost any security that is traded on a public market will experience some price volatility. Stocks, bonds, mutual funds, options, and even real estate can experience significant price volatility. Typically, volatility increases with uncertainty. For instance, a company whose stock price is predominantly based on a promising, yet uncertain future will often experience high levels of volatility in its price." primary="Volatility">volatile</glossary> and with few <glossary def="1. A portion of earnings paid to the owners of a credit union.  The board of directors decides what the dividend rate, or percentage, will be. 2. Corporate earnings paid out to shareholders. Dividends may come from company profits, interest on securities (bonds, stocks, etc.) that the company holds, the sales of securities held by the company (capital gains dividends), etc. " primary="Dividend">dividends</glossary>, the true potential of growth stocks lies in their <nodef>future</nodef> prices. They are well suited for the long-term <glossary def="Someone who buys an asset for the income it will earn and/or the increased value it will have in the future." primary="Investor">investor</glossary> willing to take a chance and hold on through <glossary def="Usually one year or less, often in reference to loans, bond maturities, or capital gains." primary="Short-Term">short-term</glossary> ups and downs. <glossary def="A category of aggressive funds interested in taking risks in order to build capital, and typically receiving fewer dividend payouts, for the purpose of increasing the value of the portfolio. This strategy entails more risk than a conservative one--for instance, more holdings will be in stocks than in bonds." primary="Growth Mutual Funds">Growth mutual funds</glossary>, which invest in a variety of growth stocks, are a slightly less volatile way to invest in growth stocks.</p><callout align="right">Growth stocks are well suited for the long-term investor willing to take a chance and hold on through short-term ups and downs.</callout><p>Another typical investment for the long-term investor is <glossary def="A legal document that is a promise to repay borrowed principal along with interest on a specified schedule or certain date (the bond's maturity). Federal, state, and local governments, corporations, and other types of institutions raise capital by selling bonds to investors." primary="Bond">bonds</glossary> with long <glossary def="The date on which a debt or other negotiable instrument comes due and must be paid." primary="Maturity">maturities</glossary> of ten or more years. Although bonds with long maturities are more at <glossary def="The chance of loss due to the uncertainty of future events. Risks can be in political systems, unforeseen changes in management, investor emotions, etc. Uncertainties in exchange rates, interest rates, inflation, loss of principal, etc. are also considered risk." primary="Risk">risk</glossary> from changing <glossary def="A percentage that indicates what borrowed money will cost or savings will earn. An interest rate equals interest earned or charged per year divided by the principal amount, and expressed as a percentage. In the simplest example, a 5% interest rate means that it will cost $5 to borrow $100 for a year, or a person will earn $5 for keeping $100 in a savings account for a year." primary="Interest Rate">interest rates</glossary>, they also offer higher <glossary def="The earnings on securities or other investments, whether they are dividends or interest, realization of profits or receipts, income, or some other source." primary="Return">returns</glossary> than shorter bonds to compensate for this risk.</p><p>The long-term investor can also invest in other <glossary def="Anything of value that a person or organization owns. Examples include cash, securities, accounts receivable, inventory, and property such as land, office equipment, or a house or car. (Compare with liability. The same item can be both an asset and a liability, depending on one's point of view. For example, a loan is a liability to the borrower because it represents money owed that has to be repaid. But to the lender, a loan is an asset because it represents money the lender will receive in the future as the borrower repays the debt.)" primary="Asset">assets</glossary> that may take longer to grow in value but show high returns over time. These include <glossary def="Land and the physical property attached to it, such as houses, buildings, factories, and trees. Where applicable by law, real estate may include gas and oil leases." primary="Real Estate">real estate</glossary>, <glossary def="A legal document that specifies all the terms, conditions, duration, and payments for use of rental property." primary="Lease">leases</glossary>, and <glossary def="Objects that are esteemed by groups of people who consider these items to have special value because of rarity or cultural or historical uniqueness. People collect a wide variety of objects, including comic books, automobiles, photos, books, and autographs. However, identifying truly marketable items is not an easy task." primary="Collectibles">collectibles</glossary>.</p><p>Investors who are willing to wait for their <glossary def="The medium of exchange used in trade or commerce." primary="Money">money</glossary> can take advantage of more volatile stocks, as well as bonds and other investments that offer higher returns to reward the investors' patience.</p></article>	