For people with some savings, it’s a good idea to keep that savings growing. One option most people choose is to invest money in the short term because short-term investments provide more liquidity than long-term investments. However, in a situation where the economy is sluggish, what is the short-term investment? To make money grow low risk, let’s take a closer look at some good advice.
The Meaning of Short-Term Investment
Short-term investment means that investments that are in a period of 3 to 6 months or 1 year, up to 3 years, which depends on the investment goals, such as some people wanting to invest to save money to buy cars or large goods. This, for example.
Short-term investment vs long-term investment, what is better?
Before you start choosing what short-term investments are good, you should understand that whether you are short or long-term investment, you need to have a short-term investment with long-term goals, the goal is different if you want to invest in a way that is financially liquid, or if you want to use it in the near future. However, both investments are risky.
Short-term investments are, despite the advantages of financial liquidity, but at the same time, there is more volatility in the price of an asset than a long-term investment. This is a risk to consider.
And what’s the short-term investment?
It depends on the investment goals you set. Let’s say you want to invest in a short way to use that money as a child’s tuition, which is considered important and necessary. The short-term investment that suits you is:
- Fixed Deposit
- Lottery or Lottery 3 years old.
- Mutual Funds
- short-term debt instruments, etc.
The aforementioned investment model is considered a low-risk short-term investment. Although the profit or dividend is not great, it is still considered to grow.
However, if your short-term investment goals are not very important or are not necessary in life at that time, you can choose to invest short-term in other ways with higher risk.
Some people want to save money on overseas trips, they may choose to invest in stocks. But don’t forget that this kind of investment is more risky. The results may not be as expected or targeted. Sometimes it can be extended to a longer investment period from the original goal, so set your investment goals well. And how important are your goals?
Regardless of what form you invest in, you want to carefully consider your investment goals and the next priority is to share the funds that will be invested accordingly. You’ll need to clear the savings you’ll need to invest, with the money to spend on a daily basis.
That means you have to split your money and plan into two plans: savings plans, spending plans, splitting money into investments, even in the short term, but you also have to be confident that if there is an emergency, you won’t get in trouble. You can manage your spending plan comfortably. Keep in mind that the funds invested will not be able to be used until the maturity of the investment agreement. Even if you can pull it back, it won’t grow. These things need to be carefully planned before making an investment decision.
Think of the question as you wonder what short-term investment is good. Now you’ve got an answer. Short-term or long-term investments have some limitations, both of which require you to consider their availability. In other words, it must be clear to the investment goals every time. If you can do it no matter what kind of investment you make, you’ll be more confident and reassuring.