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10 Disadvantages of Long-Term Investments

In this article, we will take a look at the 10 disadvantages of long-term investments. If you want to skip our detailed analysis, you can go directly to the 5 Disadvantages of Long-Term Investments.

“It Depends on the Product and Where You’re At”

On November 22, Jeff Krumpelman, Chief Investment Strategist at Mariner Wealth Advisors, appeared in an interview on CNBC where he discussed the recent positive direction the stock market has taken. In the interview, Krumpelman discusses how rising dividend yields were previously a huge concern for investors; however, with recent economic changes, the yields have decreased. Such has ultimately pushed the percentage of stocks trading above the 10-day or 50-day moving average from 10% to 70% and 20% for stocks trading on a 200-day moving average. While discussing the performance of stocks, Krumpelman adds that value stocks have been outperforming growth stocks, and equal weight stocks have outperformed market cap weight stocks. Krumpelman suggests that the market has broadened, which is a good sign that the market is moving in the right direction.

Furthermore, in response to a discussion on the appropriate stock portfolio, Krumpelman discussed his barbell approach to investing. He mentioned that both growth and value stocks are interesting, but to him, investing in particular companies trading at attractive valuations is key. He added that investors must be specific with their investments and focus on stocks with strong fundamentals. He also gave an example of the retail sector and the importance of focusing on the bigger picture of separate individual companies. You can also check out some of the biggest investment trends this year.

Stocks Trading with Strong Fundamentals

Before investing, investors are urged to make wise choices by prioritizing the quality of the stocks they are investing in. Let’s check out some of the best stocks seen as long-term investments. These include Microsoft Corporation (NASDAQ:MSFT), Pfizer Inc. (NYSE:PFE), and The Coca-Cola Company (NYSE:KO). Let’s check out some of these companies’ recent financial and news updates.

Microsoft Corporation (NASDAQ:MSFT) is a leading multinational technology company based in the United States and is considered one of the most reliable and stable companies for long-term investment. On November 8, Microsoft Corporation (NASDAQ:MSFT) announced a strategic co-innovation collaboration with Photonic Inc. The collaboration is focused on unleashing the future of quantum networking by implementing new techniques. Microsoft Corporation (NASDAQ:MSFT) will be able to execute its goals by using Photonics’ novel spin-photon architecture. The framework supports quantum communication via telecom wavelengths. The two companies will collaborate to enhance the use of quantum networking capability in day-to-day activities and operations. The collaboration will be executed in three stages. To shed light on the collaboration, Jason Zander, Executive Vice President of Strategic Missions and Technologies at Microsoft Corporation (NASDAQ:MSFT), stated:

“We are thrilled about joining forces with Photonic in improving the world through quantum technologies. There is an opportunity to ignite new capabilities across the quantum ecosystem extending beyond computing, such as networking and sensing, and unlocking applications and scientific discovery at scale across chemistry, materials science, metrology, communications, and many other fields. The capabilities we aim to deliver with Photonic can enable this vision and bring about quantum’s impact far more quickly than otherwise possible.”

Microsoft Corporation (NASDAQ:MSFT) was a part of 306 hedge fund portfolios at the close of the third quarter of 2023. The total stakes of these hedge funds amounted to $72.19 billion, up from $69.79 billion in the previous quarter with 300 positions. The hedge fund sentiment for the stock is positive. As of September 30, the Bill & Melinda Gates Foundation Trust is the largest shareholder in Microsoft Corporation (NASDAQ:MSFT) and has a position worth $12.40 billion. The stock covers 31.87% of the fund’s portfolio.

Pfizer Inc. (NYSE:PFE) is another prominent name considered a long-term investment. The pharmaceutical company is based in New York, United States. On October 20, Pfizer Inc. (NYSE:PFE) announced that the US Food and Drug Administration (FDA) approved PENBRAYA. PENBRAYA is the only pentavalent vaccine protecting common serogroups that result in the prevalence of meningococcal disease among young adults and adolescents between the ages of 10 and 25. The decision came after the FDA assessed data from the vaccine’s phase 2 and phase 3 trials. The results suggested that the vaccine has a robust immunogenicity non-inferior to rumenba + Menveo for all serogroups. The vaccine is suitable for people with a standard safety profile. To shed light on the new vaccine, Annaliesa Anderson, Ph.D., Senior Vice President and Head, Vaccine Research and Development, at Pfizer Inc. (NYSE:PFE), stated:

“As a pioneer in vaccines, one of our goals is to deliver vaccines that evolve the paradigm and help simplify the standard of care in the U.S. Today marks an important step forward in the prevention of meningococcal disease in the U.S. In a single vaccine, PENBRAYA has the potential to protect more adolescents and young adults from this severe and unpredictable disease by providing the broadest meningococcal coverage in the fewest shots.”

Wall Street is positive on Pfizer Inc. (NYSE:PFE). On November 20, Cantor Fitzgerald analyst Louise Chen reiterated an Overweight rating on Pfizer Inc. (NYSE:PFE) and maintained her price target of $75. Over the past 3 months, 5 Wall Street analysts have recommended to Buy the stock. Pfizer Inc. (NYSE:PFE) has an average price target of $39.91 and a high forecast of $75.

The Coca-Cola Company (NYSE:KO) is a leading beverage company based in Georgia, United States. On October 25, The Coca-Cola Company (NYSE:KO) announced that it is set to launch 100% recycled plastic bottles across Canada early in 2024. As per the report, the company announced that it will no longer use virgin pet bottles for its plastic water bottles. The initiative will also be supported with a “Recycle Me Again” campaign to raise awareness and push people to participate.

The Coca-Cola Company’s (NYSE:KO) commitment to its responsibility to society explains its strong financial results. On October 24, The Coca-Cola Company (NYSE:KO) reported earnings for the fiscal third quarter of 2023. The company reported earnings per share of $0.74, beating estimates by $0.05. The company reported revenue worth $11.91 billion, ahead of market consensus by $488.72 million and up 7.31% year over year.

While these stocks are well-known long-term investments, Investors are requested to use their own judgment while making investment decisions. If you are starting your investing journey you may check out the best investments for beginners. With that, let’s take a look at the 10 disadvantages of long-term investments.

10 Disadvantages of Long-Term Investments

Our Methodology

We employed a consensus approach for determining the 10 disadvantages of long-term investments. Since it is a very subjective topic, it was quite challenging to make our list. We sifted through expert opinions online to curate our list of the 10 disadvantages of long-term investments. Our sources included reports published by Forbes, Investopedia, CNBC, and the Corporate Finance Institute. We then studied each of the disadvantages separately and included them in our list in no particular order. We have included specific details, explaining the implications of each disadvantage.

It is to be noted that we are in no way coercing our readers to shy away from investing in long-term investments. Instead, the list focuses on the general drawbacks of investing in a long-term portfolio. Our list contains relevant details highlighting how certain disadvantages can be minimized or prevented.

10 Disadvantages of Long-Term Investments

10. Liquidity Constraints

According to our methodology, people investing in long-term investments tend to face several liquidity constraints. Liquidity constraints refer to the limitations investors face when trying to liquidate their assets. Long-term investments are less liquid, and therefore, investors must set aside an emergency fund to prevent such issues.

Microsoft Corporation (NASDAQ:MSFT), Pfizer Inc. (NYSE:PFE), and The Coca-Cola Company (NYSE:KO) are some of the top blue chip stocks to buy according to Wall Street analysts.

9. Opportunity Cost

Investors investing in long-term investments often have to let go of profitable short-term opportunities or other profitable asset classes or portfolios. However, this disadvantage is strictly based on an investor’s investment goals. An investor with a solid investment goal and portfolio may not be impacted as much as an investor with a lack of direction.

8. Limited Flexibility

Long-term investors must wait for their securities to mature before they are allowed to get their cash. Having lock-in periods limits the ability of investors to divert resources and are often unable to account for changing events. However, stocks or mutual equity funds happen to offer a certain level of flexibility to investors.

7. Emotional Stress

According to our methodology, long-term investments come with a great degree of emotional stress. Long-term investments can be stressful especially when markets are fluctuating or volatile. While long-term investors do enjoy the benefit of recovering from losses, the process may be a nerve-wracking experience.

6. Limited Diversification

Investing in long-term investments is a huge commitment, that often hinders the ability of being able to diversify an investor’s portfolio. Diversification is particularly important to minimize risk, therefore, investors directing their resources to long-term investments may have to miss out on potential gains from other investments, such as young and high-growth tech companies, which could potentially be more riskier.

Microsoft Corporation (NASDAQ:MSFT), Pfizer Inc. (NYSE:PFE), and The Coca-Cola Company (NYSE:KO) are some of the best long-term stocks to buy according to hedge funds.

Click to continue reading and see the 5 Disadvantages of Long-Term Investments.

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Disclosure: None. 10 Disadvantages of Long-Term Investments is originally published on Insider Monkey.

AI, Tariffs, Nuclear Power: One Undervalued Stock Connects ALL the Dots (Before It Explodes!)

Artificial intelligence is the greatest investment opportunity of our lifetime. The time to invest in groundbreaking AI is now, and this stock is a steal!

AI is eating the world—and the machines behind it are ravenous.

Each ChatGPT query, each model update, each robotic breakthrough consumes massive amounts of energy. In fact, AI is already pushing global power grids to the brink.

Wall Street is pouring hundreds of billions into artificial intelligence—training smarter chatbots, automating industries, and building the digital future. But there’s one urgent question few are asking:

Where will all of that energy come from?

AI is the most electricity-hungry technology ever invented. Each data center powering large language models like ChatGPT consumes as much energy as a small city. And it’s about to get worse.

Even Sam Altman, the founder of OpenAI, issued a stark warning:

“The future of AI depends on an energy breakthrough.”

Elon Musk was even more blunt:

“AI will run out of electricity by next year.”

As the world chases faster, smarter machines, a hidden crisis is emerging behind the scenes. Power grids are strained. Electricity prices are rising. Utilities are scrambling to expand capacity.

And that’s where the real opportunity lies…

One little-known company—almost entirely overlooked by most AI investors—could be the ultimate backdoor play. It’s not a chipmaker. It’s not a cloud platform. But it might be the most important AI stock in the US owns critical energy infrastructure assets positioned to feed the coming AI energy spike.

As demand from AI data centers explodes, this company is gearing up to profit from the most valuable commodity in the digital age: electricity.

The “Toll Booth” Operator of the AI Energy Boom

  • It owns critical nuclear energy infrastructure assets, positioning it at the heart of America’s next-generation power strategy.
  • It’s one of the only global companies capable of executing large-scale, complex EPC (engineering, procurement, and construction) projects across oil, gas, renewable fuels, and industrial infrastructure.
  • It plays a pivotal role in U.S. LNG exportation—a sector about to explode under President Trump’s renewed “America First” energy doctrine.

Trump has made it clear: Europe and U.S. allies must buy American LNG.

And our company sits in the toll booth—collecting fees on every drop exported.

But that’s not all…

As Trump’s proposed tariffs push American manufacturers to bring their operations back home, this company will be first in line to rebuild, retrofit, and reengineer those facilities.

AI. Energy. Tariffs. Onshoring. This One Company Ties It All Together.

While the world is distracted by flashy AI tickers, a few smart investors are quietly scooping up shares of the one company powering it all from behind the scenes.

AI needs energy. Energy needs infrastructure.

And infrastructure needs a builder with experience, scale, and execution.

This company has its finger in every pie—and Wall Street is just starting to notice.

Wall Street is noticing this company also because it is quietly riding all of these tailwinds—without the sky-high valuation.

While most energy and utility firms are buried under mountains of debt and coughing up hefty interest payments just to appease bondholders…

This company is completely debt-free.

In fact, it’s sitting on a war chest of cash—equal to nearly one-third of its entire market cap.

It also owns a huge equity stake in another red-hot AI play, giving investors indirect exposure to multiple AI growth engines without paying a premium.

And here’s what the smart money has started whispering…

The Hedge Fund Secret That’s Starting to Leak Out

This stock is so off-the-radar, so absurdly undervalued, that some of the most secretive hedge fund managers in the world have begun pitching it at closed-door investment summits.

They’re sharing it quietly, away from the cameras, to rooms full of ultra-wealthy clients.

Why? Because excluding cash and investments, this company is trading at less than 7 times earnings.

And that’s for a business tied to:

  • The AI infrastructure supercycle
  • The onshoring boom driven by Trump-era tariffs
  • A surge in U.S. LNG exports
  • And a unique footprint in nuclear energy—the future of clean, reliable power

You simply won’t find another AI and energy stock this cheap… with this much upside.

This isn’t a hype stock. It’s not riding on hope.

It’s delivering real cash flows, owns critical infrastructure, and holds stakes in other major growth stories.

This is your chance to get in before the rockets take off!

Disruption is the New Name of the Game: Let’s face it, complacency breeds stagnation.

AI is the ultimate disruptor, and it’s shaking the foundations of traditional industries.

The companies that embrace AI will thrive, while the dinosaurs clinging to outdated methods will be left in the dust.

As an investor, you want to be on the side of the winners, and AI is the winning ticket.

The Talent Pool is Overflowing: The world’s brightest minds are flocking to AI.

From computer scientists to mathematicians, the next generation of innovators is pouring its energy into this field.

This influx of talent guarantees a constant stream of groundbreaking ideas and rapid advancements.

By investing in AI, you’re essentially backing the future.

The future is powered by artificial intelligence, and the time to invest is NOW.

Don’t be a spectator in this technological revolution.

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A New Dawn is Coming to U.S. Stocks

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

We’re independently funding today’s broadcast to address something on the mind of every investor in America right now…

Should I put my money in Artificial Intelligence?

Here to answer that for us… and give away his No. 1 free AI recommendation… is 50-year Wall Street titan, Marc Chaikin.

Marc’s been a trader, stockbroker, and analyst. He was the head of the options department at a major brokerage firm and is a sought-after expert for CNBC, Fox Business, Barron’s, and Yahoo! Finance…

But what Marc’s most known for is his award-winning stock-rating system. Which determines whether a stock could shoot sky-high in the next three to six months… or come crashing down.

That’s why Marc’s work appears in every Bloomberg and Reuters terminal on the planet…

And is still used by hundreds of banks, hedge funds, and brokerages to track the billions of dollars flowing in and out of stocks each day.

He’s used this system to survive nine bear markets… create three new indices for the Nasdaq… and even predict the brutal bear market of 2022, 90 days in advance.

Click to continue reading…