Short Term Investments
With the economy constantly changing, many people are looking for a
stable way to invest their hard earned money with the use of short term investments.
Although there are many different ways of investing money, few of them will turn profits in a
short period of time. To some investors, having their money return benefits in ten or twenty
years is just not a feasible option. They may need the money in the very near future and they don’t have the time to wait for
many years to see some kind of profit.
That’s when many turn to short term investments. These investments are important to
both the consumer and the financial industry, giving both of them the option of using the money and seeing a
nice return quickly. Without some of the investments made for the shorter terms, many wouldn’t even consider
investing their money in the first place.
Many times, investments made for the shorter terms
can help with day to day issues that most people are faced with. With these types of monetary investments,
returns can be seen within a year or two, allowing families and individuals prepare for a foreseen future event,
such as vacation, retirement or graduation. Many smart investors use short term investments in order to get more
money to invest in a larger, more predominate investment.
A lot of investors use the short term investments option not just to make a little
money in the end, but to store money that is not being used at that time. It is a smart idea to invest the
money instead of letting it sit around not collecting interest. Although many use some type of investment for
storing their money, each investment comes with its own risks, rates and length of time that the money can be
One of the most popular short term investments
that people use is putting their money in a checking or savings account. Although most of these investments
don’t have a huge pay off rate, they are used by just about anyone that has a steady income or money at hand.
These investment strategies don’t require much money to start and can be withdrawn without any
Depositing money in a bank is easy but it does require some caution. Make sure the banking institution is insured by the federal government
or FDIC. This will protect your deposit, usually up to $200,000, and it insures that if the bank itself has
financial trouble, your money is safe. As a rule, if you deposit your money into a savings account, you will
accrue more interest than if you deposit your money into a checking account.
There are a few other investments that can be made to store, and hopefully increase,
your money. Some of the most popular are CDs, money market funds and treasury securities. These types of
investments are great for those that want to store their money for up to 10 years. Although investing in the
money market has risks all its own, many investors find that they will have a bigger return. Certificates of
Deposit is a very smart way to get a return without taking unnecessary risks that are often involved in
investing money. When investors are looking for short term investments, many turn to CD’s for these very
Types of Investments - Based on the
duration of commitment of money, there are two kinds of investment: long term and short term. The phrases “long
term” and “short term” have been borrowed from the practice of Accounting, wherein “long term” means a time period
that is generally in excess of one year, while “short term” is understood as one year or less. Click here to learn more about the different types of
Investing - Many people today are choosing to invest in the money market due to the lack of
risk that is involved. However, before you invest any money, you should know how the money market
works. In the money market, the assets that are traded are papers that evidence
indebtedness of large corporations. Click here to learn more about
money market investing.
High Yield Money Market Accounts - High yield money market accounts are investment vehicles that many
people use to grow their money in a safe manner. They are much like any other deposit type account that is
offered, except unlike traditional savings accounts, money market accounts (MMA) offer the ability to write
checks from the account. Click here to learn more about high
yield money market accounts.
Short Term Investment
Strategies-Some formulas are lower risk than others. Largely, the goal with any type of
investment whether it is the long or short term is to protect the capital and receive the largest gains with
the least amount of risks. There are some investment vehicles that are much safer than others when it comes
to the short term. Click here to learn more about short term