Best Types of Investments for the Short-Term

Mar 11, 2020 02:33 PM ET
  • Short-term investments are a way to get quick dividends.
Best Types of Investments for the Short-Term

Any person strives to increase income to be able to meet some needs. Thus, you can use investments. Large capital owners choose long-term investments that bring significant profits, but in the long term. If you do not want to part with the money for a long time, but want to make a profit, you can choose short-term investments.

Short-term and long-term investments obtain interest on the amount of fixed income. Short-term investments called up to a year. At the same time, there are options with investments for 24 hours, which also allows you to earn income. Short-term financing does not require parting with money for a long time, but the risks of capital loss are incredibly high.

6 Best Types of Investments for the Short-Term

It is because fraudulent companies usually promise high returns in a short time. Not all short-term funds allocation methods are fraudulent. There are options to make money on investments from 3% to 20% per year. It is a short period for which you can make predictable investments with minimal risk. There are still risks since the investment sphere built on them.

Types of short-term investments

The real investments directed to tangible assets, for example, real estate or gold bullion. It should note that real investments are long-term, and it will not work to achieve results from them in a short time. Payback may take several years, which is unacceptable for short-term investments. One of the varieties of real investment for a short time is the shares of new companies. For a year, they can increase their value if the company is successful. Selling securities, you can achieve an increase in invested 2-3 times in less than a year.

If you want to make real investments in the form of buying fast-growing stocks, choose startups in the IT industry. They are most likely to increase the turnover of funds, and therefore bring profit. Investments are usually associated with securities, foreign exchange transactions, binary options. Some banks have deposit programs for up to one year. Besides, one can distinguish MFIs, the contribution to which is made at high-interest rates, and is possible even for a day.

How to invest for a short time: top 7 examples

There are several investment methods designed to generate income quickly. They allow you to achieve results in a short period but are associated with risks. The market is not always predictable, so there are fluctuations in the value of different assets. Having invested, you can wait for growth and sell the asset, making a profit.

Here are some ways to invest:

  • Stocks
  • Cryptocurrency
  • Crowdinvesting
  • Quick deposits
  • Trading platforms
  • PAMM accounts
  • Hype projects

They differ in potential revenue, risk, and entry complexity. A competent investor will appreciate each method. Only after studying them can conclusions be drawn, which is especially crucial for beginners who want to ensure a result?

Method 1. Stocks

Securities are a popular investment tool that is available to investors with different capital and designed for a wide range of terms. Since most bonds provide for investments for one year, the shares of fast-growing enterprises will become optimal. The level of earnings on stocks varies. It all depends on increasing their prices. Successful investors can double or triple the capital invested in securities if the growth is significant.

Stocks

For a good result, you need to navigate the securities market, its trends. Beginners advised contacting intermediaries providing analytical services with customer support during the transaction. Naturally, they will take a percentage for this, but the risks reduced here.

Method 2. Cryptocurrency

This earnings on short-term investments appeared relatively recently, namely after a staggering increase in the price of bitcoin. It is ideal for short-term investments. Changes in the prices of individual cryptocurrencies occur uncontrollably, and the differences are significant. Having acquired a crypt, you can sell it at an increase in value, earning on the difference.

Cryptocurrency

The high level of risk of this method is that cryptocurrency can significantly decrease in price and remain at a small scale for a long time. Since this is difficult to predict, even an experienced investor cannot be sure of the success or failure of an investment.

Method 3. Crowdinvesting

This direction of investment is similar to the acquisition of shares in companies. Unlike the purchase of stocks, funds invested in the prospect of acquiring a stake in the company. Potential investors risk not making a profit, but if the startup is successful, a good profit is guaranteed. Most often, financing is required to launch the mass production of existing prototypes and ideas. The investor carries small risks, as he can get acquainted with the potential popularity of the product and evaluates it.

Crowdinvesting

The main disadvantage of such investments is that at the first stage of investments in a future company, a person is not a shareholder. It means that he will not be able to realize his share until the official issue of securities. But otherwise, the direction of investments related to crowd investing can bring high returns.

Method 4. Quick deposits

Bank deposits, although they do not have high profitability, but give a small, stable income - a percentage of the amount invested. One-year deposits offer from 6 to 10% annually, depending on the bank you choose. These are the leading institutions providing short-term investments. You can also increase profits by selecting an offer without early withdrawal.

Quick deposits

The minimum deposit for each bank is different, but the entry threshold starts from $100 or less. As a rule, deposits are the most reliable way of investments, since they insured under a particular state program. In unforeseen situations, the deposit amount will return to the investor. The downside is a small percentage, which barely covers inflation, but with short-term investments, it will not have time to affect profit.

Method 5. Trading platforms

You can earn money in Forex. Here you can purchase world currencies and make on changes in the exchange rate. How long the investment on the Internet will work is determined by the player. Changes in the course can be both short and long, which requires a quick reaction.

Trading platforms

When the exchange rate improves, the purchased currency is sold, providing a profit. It is essential to be able to analyze the foreign exchange market to make forecasts. Without this, the investment will not pay off. A beginner should not trade in the Forex market without specialized knowledge. The risks for him will significantly increase, and he will lose the money invested in the site.

Method 6. PAMM accounts

Investments in PAMM accounts, offer to transfer money to experienced brokers, who, together with their capital, increase the funds raised. Withdraw funds contributed by the investor; they do not have the opportunity. High profitability ensured by the fact that the broker at the same time risks losing his money.

PAMM accounts

Despite the commission, this method of investing is most suitable for beginners. They do not need specialized knowledge and skills, and funds can withdraw at any time. But the main nuance is the professionalism of the broker, which you need to choose based on feedback and positive statistics.

Method 7. Hype projects

It is a high-risk way to invest money on the Internet for a short time. The bottom line is to invest money in a highly profitable investment project that pays interest to early investors on money raised later. The main risk is that such organizations do not "live" for long and may "collapse" at any time.

Hype projects

To consistently make money on HYIP projects, you need to feel the fine line between deception and short-term profit. Learn to identify risky projects and avoid them. In particular, you should not pay attention to those organizations that offer very high-interest rates monthly or even daily. It is guaranteed to lead to fraud and loss of money. Choose those projects that are relatively safe and related to famous people. It gives a minimal guarantee that the project can last for some time and steadily pays dividends to all investors.

Risk level

There is always a chance to lose funds, but in the case of short-term investments, it is incredibly high. Do not trust the promises, because too high percentages indicate either fraud or the ill-conceived scheme of using funds.

Such activities have the most significant risks:

  • PAMM accounts;
  • investing in MFIs;
  • Forex
  • Crowdinvesting;
  • Hype projects.

These methods involve transferring money to third parties for management or investor knowledge in the financial sector. Without this, profit will not work, and investments will collapse.

The least risks are assumed when investing in:

  • Quick deposits;
  • Stocks of companies;
  • Cryptocurrency.

The first two methods protected by both the state and the property of the issuing company. Experience best gained in small amounts without risking all capital. It will help to understand the features of the chosen method of investing and use the data obtained in the future — practice in making forecasts, operating with small amounts, and providing the accounting.

Many successful investments were made based on intuition, which gave investors serious returns. Follow the news on the finance market. Even minor, at first glance, events can affect the success of investments. Track the emergence of new companies and projects. It can consider as the next direction of investment or competitors of existing investment objects.


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