To invest effectively is to put money into an investment with the intention of seeing a return/profit in the near future. Simply put, to invest effectively means purchasing an asset or a product with the intention of making money from the investment over a certain period of time or an appreciating value of that asset over that period of time. An investment is defined as being an investment when the buyer of that asset or property actually makes money out of it. There are many investment types but they are split into two main categories: equity and fixed income. The most common type of investment is that of fixed income where an investor invests in an asset for the purpose of receiving a fixed amount of money each year for a fixed period of time such as a bond.
Fixed Rate Savings Accounts (FRSA) and Term Deposit Savings Accounts (TDS) are two of the most common investment funds used by long term investors. These investment funds allow the investor to save and build up tax-deferred savings over time. These investments are popular among the retirement set because they provide an opportunity to accumulate liquid cash that will grow tax-deferred and be available to them when they retire. This form of investment is especially attractive to the baby boomer generation because these people have limited access to retirement funds due to the current lack of good investments outside of the pension plan. Some of the best investments for long term investors are those which offer good safety through inflation and/or interest rate stability.
Long term investments which are designed for growth include stocks and bonds. Stocks can be bought to maturity and then sold for a profit. Bonds, on the other hand, are meant to be held for a shorter period of time (generally ten years). Bond yields are frequently tied to market rates; however, there are some bonds whose coupon payments are tied to the movements of the U.S. dollar. Both stocks and bonds offer a solid return when purchased in good quantities.