Imagine building a house: you could choose something quick and cheap, which might collapse at the first strong wind, or invest time and resources in a solid structure that will last for decades. This is the difference between short-term and long-term investing.
If you aim for financial freedom, you need to think with reason rather than emotion. Plan for the future, invest consistently, and give your money the time it needs to grow.
In this article, you’ll discover what makes an investment suitable for the long term, the best options to build wealth, and effective strategies to achieve your financial independence.
What are long-term investments?
While there is no single definition, investments are generally considered long-term when they have a time horizon of seven to ten years or more. Unlike short-term investments, which seek quick profits and are subject to market fluctuations, long-term investments offer greater stability and sustainability.
No asset, no matter how promising, always moves in one direction. Even those with the best historical returns have experienced significant downturns, highlighting the risk of focusing on the short term: buying during a market correction might mean temporary losses of 10%, 20%, or even 50%.
The chart below helps illustrate this difference:
- Daily chart: Show constant fluctuations and sharp drops, which can lead to anxiety and rash decisions.
- Monthly chart: Display smaller swings but can still be challenging for those seeking predictability.
- Annual chart: Reveal a clear and consistent upward trend, smoothing out smaller fluctuations.
What can you get from these? Long term perspective reduces the impact of market volatility. With this in mind, let’s explore the assets that can drive your journey to financial freedom.
Asset classes for long-term growth
Investing for the long term can be more effective when you choose well-established asset classes. Options such as equities, property, and other proven growth instruments provide opportunities to build wealth with greater confidence over time.
By selecting these solid assets, you can benefit from enhanced stability, mitigate risks, and achieve more consistent returns. This approach enables you to create a resilient portfolio aligned with your growth objectives, even amidst market fluctuations.
1. Stock market
The stock market is one of the most effective ways to build wealth over time. Investing in stocks allows you to participate in the growth of innovative and resilient companies.
What options involve the stock market?
- ETFs: These investment instruments bundle a range of assets, such as stocks, bonds, or commodities, enabling investors to achieve diversification by purchasing a single fund, simplifying the investment process by eliminating the need to select individual assets. In Europe, the ETF market has quadrupled since 2010 , reflecting growing interest and adoption among investors.
- Stocks: Investing in well-established companies such as Nestlé, Siemens, and Unilever, which offer both stability and growth, is a highly proven strategy. Moreover, many of these companies pay dividends, which can be reinvested to purchase additional shares, harnessing the power of compound interest and accelerating capital growth over time. In 2025, companies in the MSCI Europe index are expected to pay €459 billion in dividends, with an average yield of 3.5% , highlighting the potential of this approach.
2. Real estate
Investing in real estate is a solid long-term strategy, as these assets have consistently grown in value over time. For instance, between 2010 and 2024, housing prices in the European Union increased by 54.1% .
How to gain exposure to these assets?
- Rental Properties: Buying property in urban areas like London or Berlin can provide long-term appreciation and stable rental income. However, it’s essential to consider potential vacancy periods, high upfront costs, and maintenance responsibilities.
- REITs (Real Estate Investment Trusts): As an alternative to directly purchasing and managing properties, REITs offer high liquidity and exposure to the real estate market without the struggle of direct ownership.
3. Fixed-income securities
Fixed-income securities are essential for maintaining stability and predictability in your portfolio. These assets provide regular interest payments and are generally safer than other investment classes, making them a solid foundation for any financial strategy, particularly during uncertain times.
Options for Fixed-Income Securities:
- Government Bonds: Bonds issued by stable economies, such as German "bunds," are considered low-risk assets. They are ideal for conservative investors prioritising capital preservation and market stability. Historically, bunds have offered modest but consistent returns, often serving as a safe haven during crises.
- Inflation-Linked Bonds: These bonds ensure returns that keep pace with inflation, preserving purchasing power. According to Barclays , they have shown positive real yields even during challenging economic conditions, making them a strategic choice for portfolio diversification.
4. Cryptocurrencies
Cryptocurrencies have emerged as one of the most promising asset classes in recent years for long-term investments. This trend is supported by increased institutional adoption and the proactive approach of certain countries. In 2021, for instance, El Salvador became the first country to adopt Bitcoin as legal tender , using it as an alternative to tackle economic instability.
Additionally, cryptocurrencies offer a broad range of options, enabling investors to diversify their portfolios and mitigate risks while benefiting from the growth of established assets, such as:
- Bitcoin (BTC): Often called "digital gold," Bitcoin is the leading store of value in the crypto market. Its annualised returns stand at 230% , which is 10 times higher than the second-best-performing asset class, the Nasdaq 100 Index.
- Ethereum (ETH): A leader in smart contracts, powering a significant share of decentralised applications. Notably, Ethereum is responsible for 53% of the TVL across all blockchain networks , underscoring its dominance in the DeFi sector.
- Solana (SOL): Known for its speed and low transaction costs, it has established itself as a top network for DeFi applications and memecoins.
- Ripple (XRP): Focused on fast and cost-effective international transactions.
Investing in cryptocurrencies requires a strategic and long-term approach. While market volatility can be challenging for those seeking quick profits, strategies like diversification and staking (enabling passive income generation) can optimise returns while reducing risk exposure.
Today, investing in cryptocurrencies is more accessible than ever. SwissBorg is a platform that simplifies this process for all investor profiles – from beginners to experts, conservative to risk-tolerant. With a user-friendly interface, it offers tools such as SwissBorg Earn , allowing users to generate passive income through staking strategies.
Maintaining investments
Although learning about asset classes is essential, investing is not just about choosing the right assets: true financial success comes from the continuous maintenance of your investments.
To maximise long-term growth potential, it is crucial to make regular contributions, even with modest amounts, leveraging dollar-cost averaging (DCA). Increasing contributions as your income grows can also accelerate wealth creation.
Reinvesting gains, such as dividends or interest, is another powerful strategy, allowing compound interest to amplify your results over time. Periodically rebalancing your portfolio ensures that risks are managed and that your strategy remains aligned with your financial goals.
Adjustments are also important, as your objectives may change over the years. Reviewing your strategy regularly and maintaining discipline during market volatility are essential to avoid emotional decisions and achieve financial freedom.
Conclusion
Building wealth through long-term investments requires patience, strategy, and discipline. Diversifying across traditional assets like stocks, real estate, and bonds, as well as alternative and high-growth options like cryptocurrencies, is essential to creating a strong portfolio that can withstand market fluctuations.
The secret is to start early, stay consistent, and adjust your goals as you go. As the saying goes: "The best time to plant a tree was yesterday. The second-best time is today."
