Which Is Better – Long Term Or Short Term Investment?

Which Is Better - Long Term Or Short Term Investment?

Investment is the most essential element in today’s world, it helps you understand the need for financial stability,
it not only increases the productivity of your finance but also enhances your skills towards financial understanding.
All thought most of the people who are new to the investment they always aim to earn lots of money in short-term,
well, that is not how it works, well let’s find out Which Is Better Long Term Or Short Term Investment In the Stock Market?

Well, Most people always ask for the tips and tricks of investing, but it is essential to understand and analyze the investment plan.
each and every expert advisor have their own way of analyzing their portfolio as per their needs and the purpose of the investment
plan makes it a huge impact on your investment.

If you are investing to achieve a short time goal, for Ex: let’s say a Bike or a phone you can achieve it within 1 year or maybe 2,
so no need to plan for an investment plan lasting for 10 years for the same purpose.

Let us understand what is Long Term Or Short Term Investment:

Short-Term investment :

Short-term investments are a form of investment tools lasting for not more than a year, it may be for a day, week, or 1 year.
Usually, Short-term investments are a time-consuming task, as you have to create or change your investment plans,
and then have to create your portfolio as per your requirement.
There are various tools for the short-term which provide a good return with a low-risk rate:

Treasury bills : 
Treasure bills are also known as T-bills which are government released bounds lasting from 14-days,
91-day,  and 364-day less than a year. These can be easily liquidated.

Gold bonds:
Gold bonds are a legal agreement between buyer and seller to invest into the bonds instead of purchase,
which he entitled to either exchange or receive the gold after the end of the agreement tenure.

swing trading:
It is a form of trading, wherein the duration of the trading lasts for a day it is also commonly known as intraday.
there is a high chance of risk in this form of investment, the person needs to be highly informative and dedicated.

Fixed Deposits:
Fixed Deposits is one of the safest and promising investment benefits with a specific rate of return,
they even fool under as there are variant to the tenure of investment and even easily
liquidate.

Post-Office Deposits:
The post office deposits are very similar to the Fixed Deposit and the only difference is that these kinds of deposits
can only be open in the post office.

Long-term Investment:

Long-term investment are those investments which provide a higher rate of return after several years,
Usually, these are the investment lasting at least 5 years in term of investment and the risk involved with it higher.
Most people are addicted to this sort of investment because it does not require a constant update on your investment.

People who are new to investment don’t find this idea profitable but trust the expert.
most of the advisors provide the same tip to their investors to buy the share and hold on to it until it yields a better return.

There are various tools of investment for the long-term investment,
there are into categories as classified below:

A) Easily Liquidable:
Easily Liquidable are those which can be easily converted into cash in case of emergencies.

Gold:

Gold is considered as an asset that can be easily liquidated, in case of a crisis, and most of the time value
of the gold increase that is why gold is considered as the best for long term investment,
but along with the return the changes of theft of gold are high so it is better to invest in gold bonds then in gold.

Stocks:

One of the best and hassle-free investment methods, but the challenging task is selecting a stock and holding to it,
as the factor is higher in the stock, and the fluctuation of prices is high it is difficult to Evaluate.

Mutual Funds:

Compared to stocks Mutual funds are an easier platform for the investor, the risk in mutual funds are advisory compared
to stocks, however, there is always a Mutual fund Advisor involved in the process who happens to create and look after
your portfolio.

B) Not Easily Liquidable:
These are those kinds of investment which yield a higher return with higher returns,
but these are hard to liquidate in case of emergency but it takes months to convert.

Real Estate:

Investing in real estate is a great plan you have a huge investment budget at hand, as the cost of land keeps increasing,
there is ashore guaranteed return in the future, but the biggest disadvantage is that it is not immediately liquidated.

Machinery:

Although they’re  much of similarity in Machinery and Real Estate like they are tangible assets,
but the main difference between real estate and machinery is that the value of the machine depreciates
as on the other hand, it is the opposite compared to Real Estate.
However, if the machine is an antique the value increase as the product keeps becoming antique.

Conclusion:

We cannot point out Which Is Better – Long Term Or Short Term Investment?
both the investments are important, so, it’s up to to you what is the plan you would like to go with.
so choose wisely because it will affect your financial stability.

 

[ Read More: Top 10 Rules Of Investment For Beginners ]

 

[Read More: The BEST INVESTMENT PLANS For 2021 In India ]

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Vaibhav

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