When quick profits are important, it is worth focusing on short-term investments. What are the types of investments of this kind? When is it worth deciding on them? How to invest your money in order to earn as much as possible?
Short-term investments are investments in assets with a maturity of less than 12 months or they are intended to be traded within the next 12 months.
The main purpose of short-term investments, like other types of investments, is to make profits, for example in the form of interest.
The most common types of short-term investment:
shares or participations
other securities, for example bonds, treasury bills, mortgage bonds
short-term loans
other short-term financial assets
Basically, a good short-term investment allows you to make a profit in the shortest possible time. On the other hand, however, we must bear in mind that it can also be linked to increased risk.
When is it worth choosing short-term investments?
Short-term investments are the best choice for experienced investors who have a broad knowledge of the specific method of money multiplication.
Investors choosing stock exchanges must also bear in mind that in this case, the nerves of steel are crucial, because the investor often faces many difficult decisions to make requiring speed.
Short time and high risk cause that the risk of losing money in this case is high, therefore, a short-term investment should not include all of the investor’s savings – it is important to diversify the investment.
Therefore, when we are able to accept the high risk associated with investment, in such a case the short-term methods are worthy of attention.
However, if we prefer to reduce the risk of losing hard earned money, we should think about investments with a lower, acceptable level of risk, including mainly long-term investments.