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The best passive long-term investment options for 2021

By LLM Reporters  |  May 14, 2021

Looking for a savvy way to invest your money in 2021? There’s no denying that the past twelve months have been turbulent in just about every sense, owing mainly to the global impact of the ongoing Covid-19 pandemic – but as we begin to emerge out the other side of lockdowns, business closures and job losses, many are opting to take it as a lesson to do better with their finances, creating an increased level of security to set them up for a brighter future.

While the idea of investing in stocks and shares at the moment might seem scary to some due to largely unpredictable market volatility, seasoned investors are taking the opportunity to pounce while prices are at their lowest, and could stand to make a sizable fortune as a result. There are few industries that haven’t suffered as a result of the pandemic, which has seen share prices for most companies and brands plummet dramatically – but as the world begins to open up again and with the economy set to experience a welcome boost, the time is now of the essence for those willing to take a chance.

Determine your goals

woman on laptop

If you’re considering jumping on the bandwagon, then it’s important to contemplate your options first, as while it might feel tempting to leap on the latest trend and follow other high-profile investors’ moves, your long-term goals might be very different from theirs. Before getting started, ask yourself whether you’re looking to target growth stocks, or would prefer to invest for income. You may also want to consider implementing a value investing strategy, so getting your goals and priorities ironed out is essential if you want to see long-term success.

Consider a stocks and shares ISA

stocks and shares

The UK stock market certainly hasn’t been the most favourable place to invest your money over the past few years, and it hasn’t just been down to the pandemic. Thanks to the uncertainty leading up to Brexit, and the shockwaves that followed, to say that it has been volatile would be an understatement – but as things begin to level off somewhat, we can expect to see some impressive gains across the board.

Nonetheless, if you’re new to investing then the idea of jumping in head first can feel disconcerting, especially when your expertise may be limited.

If this sounds like you, then there are some easy ways to get a foot in the door. You can get a £20,000 tax-free allowance in a UK stocks and shares ISA, which although comes with a level of risk attached, will make the entire process easier if you’re unsure where to start. Providers of these kinds of ISAs allow you to benefit from the expertise of industry professionals, who will help you to determine your goals and then match you with a suitable portfolio to ensure that you’re always investing your money in the right way for you.

Currently, the FTSE 100 Index remains well below its peak in early 2020 – prior to the onset of the Covid-19 pandemic – and is still only around 10 percent above where it sat just ahead of the Brexit referendum, which threw the nation – and the market – into chaos back in June 2016.

Look into investment bonds

investment bonds

Investment bonds are perhaps one of the lesser understood means of investment, but are a good place for new investors to begin to start getting a feel for it. And, with the right approach, they can set you up for a secure financial future.

When you purchase a bond, you’re essentially loaning money to either the government or a private company, depending on which you choose. You’ll then receive interest from them for the duration of the loan.

For obvious reasons, this type of investment is widely considered to be less risky than others – particularly stocks – but the potential for return is also lower. So, while these are a good option for anyone looking to play it safe, if you’re eager to make some substantial gains then they might not be for you.

The bottom line

With any type of investment, a certain level of risk is involved, so when determining your long and short-term goals, it’s important to bear this in mind. You might be keen to grow your fortune over several years, but it’s essential to understand the perils that may come with investing in a volatile market, so take the time to weigh this up before taking the plunge and find the right balance for you.

With the right advice and expertise, investing in the UK stock market can prove to be a lucrative pursuit, and as the road to economic recovery begins as we head out of lockdown, there is no better time to consider your options.

Disclaimer: Investing money carries risk, do so at your own risk and we advise people to never invest more money than they can afford to lose and to seek professional advice before doing so.