Welcome back dear loyal readers of Invest In The Stock, we are very satisfied and honored to have you here with us again. In today’s article we will talk about how to invest in the short term. We will see how to do it and what are the best investments to have a high return.
What is meant by short-term investments?
Let’s first start by seeing what high-yield short-term investments are, because it is advisable to know what it means to invest money in the short term and what fundamental parameters are to be evaluated in order to make investments in this specific category.
In financial terms, we refer to profitable short-term investments, to operations with a very short and delimited time window, and which usually involve the use of money to purchase products with short-term maturities, generally not exceeding 18 months.
Usually, this kind of safe short-term investment is perfect for those who do not have large sums to invest and do not want to leave them in their current account, thus not having an optimal return.
When deciding to make short-term investments of small amounts, there is one important aspect to take into particular consideration:
💎 Liquidability, meaning the possibility of selling easily and quickly what you decided to invest in.
Thus recovering your money quickly with the security that, for example, guaranteed capital products give.
Short-term investing: advantages and disadvantages
When going through a period of financial instability, short-term investing should be considered wisely.
Especially if you are a small saver who has put aside a small nest egg over the years, making many sacrifices.
Should I leave the money in my checking account?
Many people think that leaving the money in the bank account is a wise choice, but that’s not really the case.
In fact, in our opinion, the best choice is to use that same money to create more, through targeted and safe investments, perhaps through short-term shares.
In our article, we will find out which are the best alternatives to make your savings pay off quickly and easily.
But concretely, what are the advantages and disadvantages of investing in the short term? Let’s go see it together.
Short-term investment benefits
The advantage of these very short-term investments is that they have a very low risk of financial loss, and you can leverage that investment for more profitable deals that may come your way in the near future.
In fact, the main feature of short-term investments is that they have a very low percentage of risk.
Precisely because their main purpose is to secure money, in a short period of time.
Short-term investment disadvantages
As also mentioned earlier, the disadvantage of high-yield short-term investing is the minimal growth of the money invested.
In fact, to have more substantial earnings it would be necessary to invest very high sums or turn towards riskier and less protected short-term investments.
The fact remains that investing with this type of options is certainly a good choice, but if you opt for the short-term type of investment.
However, we always recommend that you be followed by expert financial consultants in the sector, this can be helpful in order not to run into certain errors, which could jeopardize your hard-earned savings.
Best short-term investments
Now let’s go and see which are the short-term high-yield investments, which are more advantageous and with less risk, which will allow you to achieve a good profit.
👉 BOT, CCT AND STATE TITLES
Let’s start with one of the most common types of safe short-term investments, namely, the purchase of government bonds, BOTs and CCTs.
They are usually regarded as highly secured short-term investments.
The important thing is knowing how to carefully choose a state capable of ensuring excellent guarantees.
This type of short-term profitable investments represent an excellent opportunity for those who want to invest small amounts.
For more experienced investors, they are a valid alternative to differentiate their short-term investments.
👉 Deposit accounts
Another interesting alternative are the Deposit Accounts, used by those who make safe short-term investments as an alternative to keeping money on a different channel from the classic current accounts.
Also in this case, it is the State that acts as guarantor, given that they respond to the security measures included in the Deposit Security Fund.
Through this guarantee, private individuals who have invested less than 100,000 euros are protected from a possible bankruptcy of the credit institution and provide higher interest, especially the term deposit accounts, compared to BOTs and CCTs.
👉 Secured bonds
Guaranteed bonds, also known as covered bonds, are also an excellent option, considered a type of safe and guaranteed short-term investment.
Since they too are covered by the Deposit Security Fund, which provides a sort of insurance for your savings.
The covered bonds are issued by banking institutions, and they are among the best short-term investments on the market, because the risks are contained and they have very low return rates.
📌 Must read: Investing In Stock Exchange, Complete Guide
👉 Good postal savings
Issued and distributed directly by Poste Italiane, these postal savings bonds are certainly among the safest very short-term investments.
Basically because they have no redemption and subscription costs, except for tax charges.
Therefore, those who decide to purchase postal savings bonds can request a refund of the amount invested and take advantage of a preferential taxation of 12.50%.
However, we would like to tell you that postal savings are very low.
👉 Online trading
The last form of short-term investment examples that we want to submit to you is through online CFD trading.
Even if it is not a safe way to invest, it can guarantee a high return having high potential.
For this reason, it is the first choice to take advantage of market fluctuations.
📌 You might be interested in: Best Online Trading Platform 2023 To Invest
To start investing in short-term shares through CFD trading, you need to open an account at one of the trading platforms authorized to operate in Italy, for example:
The Plus500 platform is suitable for experienced traders only. Though Plus500 is a very user-friendly platform, CFDs are “complex financial products”, thus the platform is not suitable for beginners/inexperienced traders.
Well dear friends of Invest in The Stock, thanks to our detailed article, you can choose from many variations on how to invest in the short term.
Invest in The Stock, The Team
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