In the world of finance, the type of investment consists of several parts, that is long-term, medium-term and short-term investments. Investors can choose all three types when they want to invest their assets based on their needs.
Investors can choose short-term investments if they need funds in the near future. But is there a safe, high-risk and legal investment?
Wealthhow says that while long term investments can assure you a secure future, they also deprive you of the much-needed liquidity in the short term. It’s a wise move to invest a portion of your savings into short term investments.
It can provide you with decent returns and ensure short term liquidity when you need it. There are several short term investments differing in the degree of risk involved.
In Indonesia, there have been many types of short-term investments that are the mainstay of investors. Especially if you want to turn money with profitable results in a short time.
Here are three types of short-term investment that you can choose:
Deposits
Deposits are popular investment instruments that are liquid and safe. The deposit is regulated and maintained by the banking regulator so that investors are safe from fraud or large losses.
This type of investment (deposits) gives returns in the form of interest which can reach 5-8 percent. There is no risk of decreasing the amount of initial capital in this investment.
The risk that is most likely to occur is the decrease in deposit interest. Nevertheless, deposits are still not vulnerable to inflation.
Banks usually offer deposits of 1 month, 3 months, 6 months, up to yearly. The longer the duration of the deposit taken, the higher the interest offered.
With this option, you can determine what deposits are most suitable to meet your financial needs.
Mutual funds
The mutual funds are the same as deposits. The investment risk of money market mutual funds is relatively low. However, this investment is considered more profitable, because mutual fund investors are not taxed.
This is different from deposit holders who are required to pay a deposit interest tax which reaches 20 percent. In short, mutual fund investors can enjoy the results of their investments maximally.
Yields on money market mutual funds tend to be larger, averaging 8-9 percent. The capital needed to own this investment is not high.
In mutual fund investments, with only hundreds of thousands of dollars, you can get mutual funds and enjoy the results in 6 months to 1 year. The invested funds will be placed in short tenor bonds. Then, the funds from the payment of the bond coupons will be distributed to the mutual fund owners.
Stocks
Unlike deposits and mutual funds, stocks have a greater risk. This is directly proportional to the large profits. But this is the most popular instrument in the world.
In a stock transaction, you can sell the stocks within a few days after buying them, even within a few hours provided you can benefit from it.
Stocks are actually suitable for long-term and short-term investments, depending on the orientation of financial planning and investment targets.
If you need funds that are relatively fast, stocks can be an option. But be careful when investing in stocks because it has a big risk.
Read more: Start Your Investment or You’ll Regret
