If you are considering in having your first shares investment, you need to know that there are two main types – short-term investment and long-term investment. You may find yourself overwhelmed and indecisive in choosing which type would be best for you. Simply take note of the comparisons between two investment types and study the pros and cons of each to be guided in making the right decisions.
Basically, short term activities aim to get a substantial yield in a short time period. While long-term investments on the other contrary, are designed to last for a few years and achieve a slow yet progressive increase in its gain. Let us discover more about the differences when it comes to the HULT PRIVATE CAPITAL disadvantages and advantages of each type of shares investment.
Short Term Investment
The key advantages of investing for a short-term plan are the potentials for upside growth at a faster period of time, ranging from a few days to a few weeks. Although there may be volatile trends that could affect the market, short-term loans can still allow you more control over your money so that you can still have a more watchful eye on your shares investment. However, this type of shares investment may be a bit riskier due to the fluctuations present in such a dynamic stock market as mentioned above. As compared to its long-term counterpart, this type of investment may be easily affected by the ever changing circumstances because it is in a shorter time frame. Thus, even if there is a big chance that you can make a lot of profits in this type of investment, there are also great chances that you can lose big.
Long Term Investment
For long-term investment plans, there is a greater ability for this type of investment to gain small and distributed profits over a longer period of time. And because it has a progressive pace, it becomes more stable and involves fewer downsides. But of course, a disadvantage for the slow growth of your investments may indicate that you cannot expect to earn money right away especially when you are desperate of money. Additionally, you may also have less control over your money because your shares investment would not mature immediately. Such investments may need a lot of patience as it progresses and due to the occurring fluctuations in the stock market. Most of the long term investments may experience down time before they can actually climb up and become profitable.
In deciding between these two key types of investments, the most crucial thing you have to consider in order to decide which plan would become more beneficial to you is to contemplate on your reasons for investing. If you have invested in shares with the ultimate goal to earn money fast then definitely a short-term plan would suit you. But on the other contrary, if you want to invest for future and insurance purposes like in cases wherein you want to have money when you grow old, then a long term plan for investing is best.