5 Long-Term Investments You’ll Thank Yourself for Later | The Motley Fool – The Motley Fool

Many of us are so busy with our day-to-day lives, making short-term decisions left and right, that we don’t pay much attention to the long term — to our futures. When we do think about it, we often put off doing things that we ought to do — like saving and investing for our retirement years. That can be a costly error.

Here are five long-term investments that are well worth making — ones you’ll likely be very happy you made.

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1. Index funds

Let’s start with index funds because for most of us, they’re the best way to invest for our futures and the easiest way, too. Being an index-fund investor means you don’t have to learn much about the stock market or investing. You don’t have to spend a lot of time studying and keeping up with stocks. And you don’t have to decide which stocks to buy, when to do so, and when to sell.

Instead, you just invest in one or a few low-cost index funds and keep doing so over time — ideally, for decades. They’ll deliver roughly the same return as the indexes they track — so a broad-market index fund (such as one that tracks the S&P 500) will deliver roughly the overall market’s performance.

Some index funds worth considering are the SPDR S&P 500 ETF, Vanguard Total Stock Market ETF, and Vanguard Total World Stock ETF, which will, respectively, spread your dollars across roughly 80% of the U.S. market, all of the U.S. market, or most of the world’s stock market. There are index funds that track bonds and other segments of the market, too.

2. Dividend stocks

Next, consider adding some carefully chosen dividend-paying stocks to your portfolio, if you’re willing to learn more about investing and to learn more about dividends.

Dividends are surprisingly powerful. Consider this: A 2013 J.P. Morgan Asset Management report that studied companies that regularly made (and increased) dividend payouts, along with companies that paid no dividends between 1972 and 2012, discovered a startling difference. The average annual return for the payers and increasers was 9.6%, versus only 1.6% for non-payers.

Here are some familiar companies and their recent yields: