Make Money Short Term – Learn how to invest your money – Loans
Investing and investing money in the short term is not the ultimate strategy if you want to achieve the best return on your capital. However, it may be more favorable to invest in the short term at relatively low risk instead of saving the money at the bank with no interest at all. Equities and funds are not good investment alternatives when investing money in the short term as equities are more volatile and can be purely speculative deals.
What does it mean to invest in the short term?
If you ask 10 different investors what they have for a short-term investment horizon, you will probably get 10 different answers. The definition of a short-term investment can differ as there are several different strategies and a short-term investment can actually extend between a time horizon of a few months to several years. Daytrading and swingtrading are investment methods that involve taking short-term positions on the stock exchange. Investors who use these methods are often dependent on volatile stocks that fluctuate on new market and company information and are not significantly affected by the company’s fundamental fundamentals. These investment methods entail very high risk and knowledge, and it is also likely that capital will decrease in value instead of the other way around. That is why we should focus on alternative investment methods with much lower risk that provide a stable return while saving your money.
Why should you invest in the short term?
The reason for wanting to invest in the short term may be, for example, that you plan to buy a home within a few months or a couple of years, and do not want to put the money in the bank where they do not grow at all, but also do not want to risk losing their money on the stock exchange. They simply want to lock in their capital without losing value in the bank and hopefully also grow. By investing in, for example, a fixed income fund, you can give your savings capital a relatively good return on low risk and thus with a high probability of growing your capital and even get a slant over to renovation when you make your purchase of example housing.
What should I invest in in the short term?
The most suitable investments for a short-term investment are usually fixed income funds or fixed rate accounts. Short-term investments can be somewhat tricky as you want as high a return to as low a risk as possible, and if you find an asset class that is equivalent to the risk-free interest rate, the return is likely to be eaten up by inflation. That being said, there are several well-yielding fixed income funds, but also new asset classes that give higher returns in the short term. Wilma Duy is a type of investment where you can invest money and get your return in the form of interest income. At Wilma Duy, you as an investor finance unsecured loans in so-called peer-to-peer loans.
This week’s Curiosity!
Do you want your savings to be liquidated by keeping the money at the bank? Let’s say you save 1,000,000 USD on the bank to buy a house in 2 years. Assuming inflation is about 2% annually and given the current interest rate climate, your USD 1,000,000 will be worth about USD 961,000 in 2 years! It may be worth considering when deciding what risk you want to take in short-term investments.