Tuesday, December 25, 2012

How To Invest Long Term

      First of all happy holidays from Alleyway Investing! Long term investing seems to be a popular strategy by most investors to get ahead and save for their kids colleges or retirement. Alleyway Investing specializes in short term investing, although we do have long term options for you.
     Long term investing can be from 1 year investments to years of investments. Maybe never sold. Long term investing is liking a company for years, a company that can be trustworthy, non volatile, and can go with or sometimes even beat the markets. Their are many sectors that you can invest in for long term. Look for low P/E ratios and low volatility stocks. The less risky the stock the better for long term. Depending on how long term your planing, there is one sector that I think is a perfect long term investments. Although it may be questioned by most investors. The energy sector I think is a perfect sector to invest in for long term. Energy sources for the most part that we use today; coal, oil, and gas are not renewable and as solar energy and wind seems to creeping up it is not a significant energy contributor around the world just yet. (but those are good investments too)
       The energy sector goes with supply and demand of the world's energy. And with a rising population, the world then in turn needs more energy. Energy is needed around the world and since it is not renewable it is bound to run out at some point, whether it be in the near future or long future. Energy goes hand and hand with politics. The energy sector is sensitive to political events. So, I know this sounds bad, but in times of turmoil, the energy sector tends to increase. Those are times you may make the most profit. Also in times of more demand and less supply of energy; the energy sector will tend to increase. Although, the biggest flaw is since there is such little volatility in the energy market, the US government regulates the prices of energy so they can stay for the most part even upon most competitors. Sounds like cheating right? Well that just makes it so everyone in the US gets the fair price for their electrical bill. So, why invest in it? Well the price of it should eventually go up in time and makes it a great sector to invest in. Foreign energy markets seems to be great bet since they tend to regulate it less than they do here in the US.
       Now you may be reading this and thinking i'm crazy since the energy sector as been lagging the last decade. Well I assure you that won't stay that way for the next couple of decades, energy; especially around the world, should be rising in different countries especially the third world countries. The energy stocks to invest in for the long term Exxon Mobile, NextEra Energy, Exelon Energy, Duke Energy, FirstEnergy Corp., and Schlumberger. Do your own research and see if these stocks fit you.
     If you want to stay away from the energy sector, then look for different staple stocks that have low volatility and some good momentum. Just keep thinking future with long term stocks. What is going to be most needed in the next 10 years? If you keep that in mind then you will be in good shape for the future.

Stock opinions are from a minor. Follow at own risk.

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