How do you balance short-term and long-term investments?

How do you balance short-term and long-term investments?

Expert Solution

Long-term investments are investments that pay back over a period of numerous years. While making long-term investments, we can choose to be more aggressive and may decide to invest in an aggressive mutual fund to get the maximum rate of return.

Short-term investments, as the name indicates are traded within the time-frame of three years or less. Investment channels that lend themselves to a shorter investment time period are mutual funds, stocks, and some bonds & bond mutual funds.

Achieving the right balance

When it comes to investing, it is essential to discover the right balance based on our individual condition. Before investing, whether it is for long term or short term, we must have clear objectives in mind.

Even though we are highly interested in short-term investments, it is advisable to set in reserve a share of your money for long-term investments. This will safeguard your investments if in case we happen to lose our money due to an unexpected market collision or bad investment choice. Investing is a significant money making tool and not something to sidestep or be scared of, so do it with patience and careful research.

jeff jeffy answered 1 month ago

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