Long Term Investments, One Form of Investment

In terms of time (duration), the investment can be divided into two categories, namely Investment Current and Long-Term Investments. Investment smoothly, that is an investment that is easy and can be immediately cashed. These investments are intended to be held for a year or less than a year. Meanwhile, long-term investments are investments held in the long term is intended as a reserve fund.

For some companies or peorangan, investment activity is an important element in the operation of the company or individual. And performance appraisal companies or individuals may be entirely dependent on the reported results of investment activity.

Some companies make investments as a form to store the excess funds. And, several other companies make investments to strengthen business relationship or get an advantage from planting investment.

An investment can be in the form of debt, both short-term debt or commercial debt, or equity instruments. Generally, the investment has a form of financial rights, such as investment land, buildings, gold, diamonds, or commodities, other commodities that can be marketed.

For some types of investments, there is an active market that can form the market value. For these types of investments, market value is used as a benchmark setting a reasonable value.

Long-Term Investment Objectives
A company or individual doing long-term investments based on specific objectives. The purpose is likely to differ between one company and another company. One purpose of investing is to seek profit.

Basically, the investment aims to gain as much as possible. However, for certain companies or individuals may have the primary purpose other than profit. Here are some investment purposes.

- Getting a fixed income in each period, such as interest, royalties, dividends, or rents, and others.

- Establish a special fund. For example, funds for the benefit of the business expansion the company or individual and social interests.

- Control or control of another company or other individuals through equity or partial ownership shares in a company or individual is.

- Ensuring availability of raw materials and obtain market for the products produced.

- Reduce competition among similar companies.

- Maintain relationships between companies.

Forms of Long Term Investments
Many options for the company or companies to select and establish long-term form of investment. There are companies that choose to invest in land or buildings (not for the operating company) is called with property investment.

There are also companies who choose to invest in savings, deposits, or any other form of investment choices, such as the purchase of bonds or shares. Long-term investments a company can be done in the form of stocks or bonds. In comparison, both forms of investment has advantages and disadvantages.

Long-term investments in bonds guarantee a clear and definite upon receipt of interest within a certain time. If interest rates on the market decreasing, interest rates will not change following the bond market because interest rates have been defined in the agreement early.

Meanwhile, long-term investment in the form of a purchase of shares can provide higher income than the rate of interest on the bonds if the company gets high profits. And conversely, if the value of shares held to fall in the market, companies or individuals will experience losses.