Safeguard Your Capital With Short-term Investments

Investments. Young woman investor buys stocks on the stock exchange stock market from home

Every part of our existence depends on money. We get up every day to go to work to  earn money to sustain our living and secure our future. But should we put our hard-earned cash where it can provide strong returns and aid us in achieving our immediate goals

Otherwise, it’s time to think about making short-term investments. Depending on your investment , there may be extra considerations to make in terms of implementation once you have decided that your plan and goals call for short-term investments.

At Pearl Lemon Invest, our financial advisors can help you create a financial plan that fits your short-term goals and considers your entire investing strategy from a wider perspective.

Get in touch with us today to learn more about what we can do for you.

Short Term Vs Long Term

Clarifying your objectives, risk tolerance, and investing preferences are necessary before creating an investment portfolio. 

Additionally, you need to be conscious of your time frame. Are you in it for the long run, or are you searching for quick cash? This will affect whether your portfolio is focused on short-term, long-term, or a mix of the two investments. 

It will be easier to ensure  that your investment portfolio suits  your unique goals if you understand the difference between short-term and long-term investments.

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Young Woman Working With Stock Photos

The ideal investments for you are short-term if you want a lower risk. Short-term investments are safer and more reliable solutions because of their lower risk. 

An investment for the short term can assist in diversifying income streams in market turbulence. Investments classified as short-term often last shorter than a year. These investments can be made using securities such as stocks, bonds, commodities, and currencies. 

The time they are retained is the key contrast between short-term and long-term investments. Usually, these investments aim  to provide a better return than other types of investments.

Short-term investments can also yield greater interest rates than other types of investments due to the enormous volume of quick purchases and sales by several investors. They don’t need as much paperwork or documentation as long-term investments because they are liquid.

Short-Term Investments Worth Considering

To assist you in achieving your short-term goals, you will need to develop short-term investment plans. Let’s look at the top short-term investments and determine how your investment goals, risk tolerance, and approach align with them:

Fixed Maturity Plans

The duration of fixed maturity plans can range from five years. They invest  in bonds whose residual maturity matches the fixed maturity plan’s duration. 

The only way out of a closed-ended plan like an FMP might be to sell it at a loss on the secondary market. If you have a one-year holding period, FMPs are an excellent instrument to boost your return quotient.

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Team of investors

Stock Market

Stock markets are the best short-term investments for high-risk takers to invest in and earn maximum returns. If you can identify the right stocks, invest in them for a few months to double your money. You could lose your entire investment if you bet on the wrong stocks.

Debt Mutual Fund

These mutual funds mainly invest in debt securities, including corporate bonds, government bonds, treasury bills, commercial papers, and other money market items. This is the greatest short-term investment option for  risk-averse investors wanting better short-term returns.

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Team of investors

Recurring Deposits

A fixed deposit is a one-time, lump-sum financial investment. However, it’s likely that you consistently make money. 

Additionally, there is no chance for routine investment. If you wish to make a specific monthly investment — recurring deposits are a short-term savings strategy that enables you to achieve this. 

A recurring deposit can be set up at your bank or another nearby financial institution (NBFC). The recurring deposit plan offered by the post office is likewise well-liked. 

A contract between six months and ten years is a possibility. Frequent investing can be combined with all the benefits of fixed deposits, including safety and ease of investing.

Liquid Funds

Debt funds that invest in money market instruments that produce a short-term fixed interest are known as liquid funds. In the portfolio of a liquid fund, underlying securities include things like Treasury bills, commercial paper, and other securities. 

People with  a lot of extra money and looking for safe havens should use liquid funds. You can invest your extra money in a liquid fund to generate significantly larger returns than you would by storing it in a savings account. 

Performance-based rewards, bonuses, and other pertinent gains realised from selling capital assets are a few examples of surplus money. Equity mutual funds may be purchased using liquid funds.

Young man analyzing graph stock market trading on digital tablet.

Make Smart Short Term Investments

Not anybody wants to have the time to become an expert investor. However, it is now more crucial than ever to match your financial plan with your short-term investment goals. 

Our financial consultants at Pearl Lemon Invest can assist you if you want a straightforward investing strategy that you can stick to without continuously worrying about changes in the economy or financial crisis.

From selecting the most appropriate short-term investing method to a smart strategy that will help you maximise your investment returns, our specialists can assist you with it all.

Contact us today and get started.

FAQS

Short-term investments are not a bad thing to make in the long run. But, you need to understand how you can tell when it’s time to take a short-term investment. 

Short-term investments are not only good for your financial goals but also your mental health.

You should invest money in things that keep you busy, like reading and exercising or going out with friends and family.

Cryptocurrency is a new technology used to buy and sell things online. It is a decentralised digital currency which uses cryptography to make transactions secure. 

Some people speculate that cryptocurrency could be the next big thing for financial transactions. As it is decentralised, no regulators or police can take away your money if you lose it. So, this could be an investment which will provide you with a high return in the future as well.

The answer depends on many factors, such as age and risk tolerance. It’s best to sell your short-term investments when you feel confident about your long-term financial goals and can wait until you have more reliable income sources. 

If you are young and inexperienced, it’s better not to invest because your capital will likely be lost within a few years if the market goes down or you lose confidence in your investments.