Types of Long-Term Investment Options

Long-term investments are financial instruments that you hold for more than a year. Most investors hold these investments for several years at a time, building them into portfolios with a specific strategy, such as provident funds and long-term savings accounts. However, common long-term investments gain value slowly but predictably, making them better assets to hold over several years. 

At Distributed Energy, we focus on long-term, private renewable energy investments. As an investor, you can benefit from automatic diversification, reduced minimums and dependable cash flows.

One of the main concerns for any type of investing is market volatility. Volatility measures the degree to which prices change over time. Another way to think of volatility is in terms of price fluctuations. The greater and more frequently an investment's price deviates, the higher its volatility. Investments with high volatility have a high degree of risk because their prices are unstable.

The advantage of long-term investing is found in the relationship between volatility and time. Investments held for longer periods tend to exhibit lower volatility than those held for shorter periods. We currently have several projects on our online aggregation platform that are ideal, long-term investment options that will help you create a more efficient portfolio and improve your risk-adjusted returns. 

Comparison between Long-Term Investment and Short-Term Investment

Long-Term Investment	Short-Term Investment
Less risk	Higher risk
Small and Steady	Speculative
High Value Returns	Usually a lump sum investment
Benefits From Averaging	Least benefit from Averaging
Strategical investment	Impulsive investments
Returns accompanied with Tax benefits	Limited to no Tax benefits

Most of the high return, long-term investments can be categorized as:

• Public Provident Fund or Super Annuation Funds

The PPF or super annuation style funds (e.g. 401(k) in the US) are one of the most popular long-term saving-cum-investment product structures. This is mainly due to their combination of safety, returns and tax savings. Most of these structures are normally protected by the respective governments.

• Direct Equity or Share Purchase

When we invest in the equity shares of a company, we are, in legal terms buying the ownership of the company. The total amount that a company plans to raise is divided into small fractions called shares, which have a value in rupees. We become the owner of the company subject to the number of shares we owe.

• Investment in Bonds

A bond is a fixed income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental). A bond could be thought of as an I.O.U. between the lender and borrower that includes the details of the loan and its payments. Bonds are used by companies, municipalities, states, and sovereign governments to finance projects and operations.

• Investment in Renewable Energy Sector

Energy from renewable sources such as wind and solar has quadrupled globally in just a decade. This is more than triple the amount of the previous decade. Figure 1 illustrates the general pattern in energy investments in 2018 and anticipated investments in the energy sector over the next decade. Renewable energy, more specifically wind and solar power, will be the leading and preferred choice for energy sector investments. This increase stems from the slump in costs of renewable energy deployments, with the levelized cost of solar photovoltaic down 81%, solar accounted for the largest single share of the more than 2300 GW of additional power capacity installed globally in the past decade, outpacing fossil fuels such as coal and gas.

Figure 1 : Energy Investment in the World for 2018 and by 2025 - ‘30

Our goal at Distributed Energy is to match credible renewable energy projects with investors. As a potential investor looking to invest in the renewable energy sector, Distributed Energy will build a portfolio for you in renewable energy that is vetted by industry veterans and trusted by hundreds of investors. Average length of investments in our projects range from 7-20 years and you can expect a target net IRR of 15%+.  If you are interested in learning more about us and our investment opportunities, visit our website at https://de.energy/ .