Shares Investment - Comparsion Between Short Term Investment And Long Term Investment

If you are thinking in making your first shares investment

, you need to know that there are two main types - short-term investment and long-term investment. You may find yourself overwhelmed and confused in choosing which type would be best for you. Just note down of the differences between these investment types and consider the pros and cons of each to be sure in making the right decisions.

Basically, short term plans aim to result a substantial yield in a short time period. While long-term investments on the other contrary, are designed to last for a few years and present a slow yet progressive increase in its gain. Let us find out more about the differences when it comes to the disadvantages and advantages of each type of shares investment.

Short Term Investment

The key advantages of investing for a short-term plan are the potentials for upside growth at a faster period of time, ranging from a few days to a few months. Although there may be volatile trends that could affect the market, short-term loans can still allow you more control over your money so that you can still keep a more attentive eye on your shares investment. However, this type of shares investment may be a bit riskier due to the fluctuations present in such a dynamic stock market

as mentioned above. As comparing to its long-term plan, this type of investment may be easily affected by the unpredictable circumstances because it is in a shorter time frame. Therefore, even if there is a very huge chance that you can make a lot of money in this type of investment, there are also great chances that you can lose a lot.

Long Term Investment

For long-term investment plans, there is a greater chance for this type of investment to gain small and distributed profits over a longer period of time. And because it has a slow but steady pace, it becomes more predictable and involves fewer downsides. But of course, a disadvantage for the slow growth of your investments may indicate that you cannot expect to earn profits immediately especially when you are badly in need of money. Additionally, you may also have less control over your money because your shares investment would not mature right away. Such investments may need a lot of time as it progresses and due to the recurring fluctuations in the stock market. Majority of the long term investments may experience down time before they can actually go up and become productive.

In choosing between these two major types of investments, the most important thing you have to think in order to determine which plan would become more beneficial to you is to rethink on your objectives for investing. If you have invested in shares with the ultimate desire to earn money fast then surely a short-term plan would suit you. But on the other contrary, if you wish to invest for future and insurance purposes like in cases wherein you want to have money when you grow old, then a long term plan for investing is ideal.

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