The investment strategies you put in place are dependent largely on your risk tolerance and financial goals. Your age and income are also factors in determining whether you should focus on short-term or long-term investments. For most people, a combination of investment opportunities makes the most sense. If you have both short-term and long-term personal goals, having your investment portfolio match those goals is ideal. Here are some short-term, intermediate-term and long-term investment opportunities to consider.
Short-Term Investment Opportunities
You won’t earn a significant amount of interest in short-term investment opportunities, but something is better than nothing. The most popular short-term strategies include savings accounts, money market accounts or certificates of deposit (CDs). For savings and money market accounts, you can expect to receive a return of anywhere between less than 1% to as high as 2% at most financial institutions. While this number is very low, the benefit is your money is always readily available if you need it. A CD may be an option if you believe you can live without a certain amount of money for a couple of years and want to lock it into a higher interest rate. The interest rate for CDs may be greater than 2%, but the downfall is you will be penalized for withdrawing any money before the predetermined time period ends.
Intermediate-term investments focus on a timeframe of about 3-10 years in the future. Viable investment options include long-term CDs, peer-to-peer loans, short-term bonds and stocks with low volatility. When looking particularly at stocks with low volatility, pay attention to a company’s stock history and select a historically stable one. Examples could be grocery stores, electric companies or other industries that are considered to be essential for people. Regardless of the intermediate-term investment strategies you put in place, you can expect to receive interest rates of greater than 2% and sometimes even as high as 5%.
Long-Term Investment Strategies
Long-term investment strategies involve looking more than ten years down the road and refer to stock investing, long-term bonds, exchange-traded funds and more. Most people can tolerate a little more risk with long-term investment strategies since there’s more time to rebound in the event of a market crash. You can be as active as you’d like in the stock market or with exchange-traded funds, with the ultimate goal being to set yourself up financially for retirement. The higher the risk you take, the higher the potential reward could be, but you have to also understand the peaks and valleys that come with market volatility over time.
Stock Investing Info is here to help you navigate through the investment opportunities available to you. The key to successful portfolio management is diversifying your investments. For some people, this means a mixture of short-term, intermediate-term and long-term investments. Every person’s situation is different, so contact us today to speak with a professional and receive advice based on yours.