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Short Term Investment Strategies

Why bother waiting until you are ready for a long-term investment before you start cashing in on interest earnings? Short term investments are excellent choices for your money in between your other investment strategies. They are also great options for saving money that will be readily accessible. Learn more about Fisher Investments, and their options available for shorter term investments.

Putting your money into funds with a low risk factor attached to them is an excellent idea, especially when you know that the money will only be there a short time. With a long-term investment, plenty of time exists to ride out any rough periods in anticipation of a return to higher earnings. However, with a short-term investment, if anything goes wrong and the return isn't as great as once imagined, there simply isn't any way to bounce back.

Money market funds, as one of the most stable forms of investments, are an excellent short-term investment vehicle. They allow you to begin earning money on your investment, and yet, they don't tie the money up for an interminably long time. Other positive reasons to consider a money market fund for a short-term investment include safety and stability.

Additionally, money market funds provide flexibility with their liquidity. Money market fund shares can be sold at any time at the current share price. Moreover, the yield on a money market fund is competitive with that realized on many savings accounts offered by various banks and credit unions. Another savings attached to this type of investment is the opportunity to realize tax savings at the state or federal level, especially for those investors in a higher tax bracket.

Low risk stock funds are one of the viable options for short-term investments. It is essential however that you do your homework on this one. Avoid stock funds that have costly loads or sales charges. Although such charges are never desirable, they cut into your profit too much with a short-term investment.

Bonds and bond funds are another viable option for a short-term investor. Even though the payout isn't spectacular, they are safe and steady. With individual bonds, you make the selection of the bonds yourself, whereas with a bond fund, someone else does all of the work for you.

In fact, a professional investor who most likely has a team of researchers at his disposal manages bond funds. This team helps to evaluate the makings of a decent bond portfolio. Additionally, unless you have access to huge sums of cash, you may be somewhat limited in the type of bonds that you can afford to invest in on your own.

Creating a laddered portfolio is another option for investors. Basically, this involves acquiring securities with different maturity dates. This practice helps to safeguard against wide fluctuations in interest rates.

Loan Participation Funds provide another safe avenue for the short-term investor. Loan Participation Funds are the same thing as bank-loan funds or floating rate bank loan funds. Loan Participation Funds invest in the loans that banks make to companies. In most cases, the companies pose a risk for repayment of the loan; therefore, a higher return is usually attached to this investment.

Short-term investment choices are many and quite varied. Check into your available options and select the one that you are most comfortable with. A good investment strategy can help you to realize a nice return on your money.