Short And Long Term Investments

If you have taken out a mortgage to buy real estate and are facing difficulty in paying it back, you should find ways to earn money and get mortgage help. There are various ways to earn money. One of the most lucrative amongst these is investment. There are various sectors, in which you can invest such as stocks, bonds, forex, mutual funds and so on. Some of these are short term investment and some are long term. Depending upon the state of your financial needs and the kind of investment that you are comfortable with, you can either venture into short term investment or long term investment as both of them have their advantages and well as disadvantages.

How can you decide about your investment?

If you are in a financial crisis, you must be facing multiple problems. On one hand you must be losing your mind as your portfolios are going down the drains, on the other hand you must be quite desperate to replenish your funds that are diminishing. However, you should keep in mind that since you are already facing trouble with your mortgage, you cannot afford to experiment in a volatile environment. Hence if the market is unsteady it is better that you go for a long term investment, say up to a period of 5 years where the chance of making money will increase. Short term investments are designed in such a way that they will show a significant yield within a short span of time. Long term investments, on the other hand, would last for a number of years but show a steady increase so that the yield at the end of the term becomes quite significant.

What are the advantages and disadvantages of short term investment?

The biggest advantage of a short term investment is that it gives a fast growth. With a term ranging from a few weeks to a few months, short term investment can give you almost ready cash. Even though short term loans tend to fluctuate quite a lot, it will allow you to have more control over your money since it is not out of your possession for a long period of time. Along with the above advantages, there are several disadvantages too. Usually short term investments tend to be quite risky and show heavy fluctuations when compared to their long term counterparts. There is chance that you will lose money in short term investment as much as there is chance to make money. This is more applicable when you are dealing with stock market as most of the short term investments made with stocks and bonds involve precise timings in order to sell stocks or bonds at their peak value before they start falling.

What are the advantages and disadvantages of long term investment?

These are the opposite of short term investments and they possess the ability to gain small amounts of money steadily over a longer period of time. The pace of the long term investments facilitate a greater degree of stability and much lower risks as compared to short term investments. These are also ideal for making your retirement savings by investing in funds. These investments keep growing over the years and mature when you need them. there isn’t much prevalent disadvantage of long term loan apart from the fact that their growth is slow over the years.

Thus it can be said that, if you want a high yield in a short span of time, long term investments are not your thing. In fact, sometimes long term investments can decrease in value before they rise if you consider the fees that are associated and the small fluctuations that are bound to occur. However, with short term investment it might not always pay off and you may not even get the little money that you can from long term investment. Thus it is your call whether you choose risk over stability.

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