How to Invest for Short-term or Long-term Goals

When thinking about investing money, there are a lot of things to consider. One of the most important criteria is time. You should pick carefully where to invest depending on how soon you will want to receive your return or withdraw the money. This is why short-term and long-term investments exist. They have their benefits and disadvantages, but neither of the options is better than the other by default as they serve different purposes. Read along to find out how to choose the best type of investment for your specific goals.

Short-term or Long-term?

People start investing for certain reasons that define whether a short-term or long-term investment is better for you. Of course, the general idea is to make your money work and receive a decent return. However, investing money to save up for a wedding that will take place in a year and preparing capital for retirement twenty years from now are two different things. Here are the differences between the two investment types, which will help you with choosing the right one:

• Short-term – people usually go for short-term investments when they have a more or less clear deadline. For example, you want to buy an apartment, pay for a wedding, plan a holiday, etc. In all of these scenarios, you will need the money rather promptly and have the possibility to withdraw it without paying huge fees. Such money online investment often comes with lover risks, but it is not completely risk-free. This relative stability, however, means that you will receive a lower return over such a short term. But the best advantage is the high liquidity of funds that allows withdrawing cash quickly and easily.
  
• Long-term – the main benefit of long-term investing is definitely a higher return. It is impossible to earn as much with short-term investments. However, it takes a long time for the money to generate such a big return. It usually takes years upon years to profit from long-term investments in full. The key is to keep your investments even when the market goes through its downs. Long-term investments are great for accumulating wealth for retirement. However, this option has lower liquidity as this money is not meant to be withdrawn and then invested back and forth.

In the end, it all comes down to how long you are willing to wait for your money or how soon you will need to get it back. Investing money for over a year even is considered short-term. But if you are ready to wait for ten years or more, this is a long-term investment.

Places to Invest your Money

When you finally decide on the period of your investment, you can start picking a suitable solution. Here are the best options if you need to invest money online for the short term:

• Investment funds – if you are looking for high liquidity and the possibility to make small investments, such funds will be very convenient. Alternative investment platforms like Quanloop allow depositing money at lower risk. Quanloop, for instance, has three risk tiers, and it is impossible to allocate all your capital to the highest of risks. It is allowed to make tiny deposits that start from one euro, which is especially convenient for beginners who want to learn the mechanics of the platform.
• Savings accounts – there are plenty of savings account options with a high yield. This solution is convenient for both saving money and earning some passive income. This is a safe option that also allows accessing money when you need it for some unexpected spendings.
• Fixed-income investments – another popular short-term solution is buying fixed-income securities. They offer lower risks than investing in shares for the long term and help with preserving the capital.

If you need to know where to invest money online for the long term, here are your options:

• Stocks – these assets can provide high growth and incredible return over time. It is important to buy shares from a company with high potential to make the most of your investment.
• Real estate – this is a classic investment solution. While a big starting capital is required, it is possible to receive a great return in the long run.

Knowing your personal needs will help with picking the right solution to start investing.