In business and finance markets, the best way to earn wealth is by buying fruitful stocks and investing in the right company which gives good profit in the future. It is a matter of taking risks, showing determination and commitment at the same time, and having the intricate study of the market in the first place. In this new generation, we are seeing that technology is the driving force of all kinds of business and the ways and strategies of investing are also changing rapidly.
Here in this article, we are going to briefly discuss short term and long term investment strategies and will conclude on the better one. For better market study before investing, get some input from the high leverage Forex brokers in the UK.
What We Mean by Short Term Investment?
As the name properly suggests, short term investments are those deals or trades which are implied only for a short stint of time. In the short term, it means three or less than that. Most people choose short term investment when they have a market reading of a company that will go through a boosting period for the upcoming few years and might go into a declining phase after that. The declining phase can be for many reasons but increasing competition in the market can be one of them. In the short term strategy, the liquidity instruments are high which assures lesser risks for the investor. The financial instruments which come under the category of short term strategies are gilt funds, treasury bills, low duration debt funds, money and capital market funds, ultra-short term debt funds, large-capital mutual funds etc.
What Do We Mean by Long Term Investments?
The term says it all that long-term investments are those kinds of investments where the investors are expected to get high returns of profit for investing in a company after a substantially long period. The period is five years or more. Investors go for this kind of investment when according to their market study, they presume that they will receive higher returns after a long period, investing in this company and they speculate that the company will keep on doing good in the years beyond that period as well. A company that enjoys a monopoly in the market gets frequent long-term investors.
Some of the instruments of long-term investments are stocks and equity fund mutual returns.
Conclusion: Which Strategy Is the Best?
Now we came to our most interesting part: which is going to be the finest investment strategy for beginners according to the market. Well, we can not pick an obvious winner here. If you are willing to take lower risks and earn a fixed amount of profit returns from your investment you can opt for the short-term strategy. But if you are a risk-taker, and you want to earn much higher returns after a long period as profit returns from your investment, you’ll have to go for the long-term strategies. Both the strategies provide you benefits in their way and both have their cons as well.