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Advantages Of Short-Term Investment

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papWhat is short term investment?
To invest is to allocate money in the expectation of some benefit in the future. Clocks of our minds start ticking on hearing of investment. Where to invest? How to invest? How much to invest? What will be the results? Is it safe to invest? These are just few of the many questions which pile up in our brains when we think of securing capital. Investment altogether is a necessity for a financially secured future. It is basically of two types - long term and short term. When talking about short term investment, it is designed to provide considerable returns in a short span of time which can be a year or even few months. It is more focused to meet the expected near future expenses. People who are inclined towards short-term investment are not interested in waiting for years in order to get their money multiplied. With short term investments, one …show more content…

Flexibility
One of the big advantages of short-term investing is that you have some flexibility. You do not have to tie up your money for an extended period of time with this type of investment, as is the case, for example, for the many people who purchase a corporate bond that has a maturity of somewhere between 10 and 30 years. With this investment you have to keep it for a long time before it matures. You could sell it in the secondary market, but you may not get what it is worth.
2. Returns
Another advantage of short-term investing is that you can get substantial returns. With this type of investment, you can often realize great returns after only a very short amount of time. Then you sell the security to lock in your profit and look for something else to put money into.
3. Tangible Results
Many investors like to be able to see some type of tangible results in their investing. With long-term investment, it might take a great deal of time before you see any results, which can be discouraging.
Disadvantages of short term investment: -
1. Low

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