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What Investments are the Best for Short-Term Returns?

Financials

What Investments are the Best for Short-Term Returns?

Comments Off on What Investments are the Best for Short-Term Returns? 24 January 2014

After a lot of discipline and sacrifice, you find that you have accumulated some funds and would love to invest. On top of this desire, you want to start with investments that yield returns in the short term. Investing is always risky but it is the way you manage this that makes all the difference. Majority of investors prefer to go for long term ventures where they can maximize rewards. In this context, a short term is any period between one and five years. Suffice it to say that you can still make profits from short term investments while still minimizing risk. Here are some ideas to get you going:

Stocks

You can make a decision to buy different stocks from a list of companies that you are interested in. At the end of the year, these companies will publish their annual financial reports. As they do this, they will close their books and declare profits made. In return, you will be rewarded with dividends as one of the shareholders. There is a high potential to earn high dividends but this will depend on the companies’ profitability pattern, type of shares you buy and the amount.

Bonds

The government issues bonds in order to borrow money from citizens. The money is usually intended for financing major projects such as roads, bridges and other infrastructural development. These bonds take about 3-5 before they mature. Upon maturity, the government gives you back what it had borrowed plus some interest. The best part is that bonds, particularly treasury bonds are usually guaranteed by the same government. Unless the government is going broke, you are guaranteed of a repayment.

Certificate of deposit

This works in the same manner as your regular savings account. The only difference is that there is a maturity date. This can be annual, half yearly or on a quarterly basis. The amount of interest is also fixed. On the other hand, your money is fully insured. Upon maturity, you are at liberty to withdraw the cash plus the interest it has accrued.

Savings accounts

The best way to avoid spending cash aimlessly is to keep it away. Even though the interest is not high, keeping money in a savings account is always good. The bank pays you interest all the same and you can withdraw money any time you want. You can still use this feature together with a checking account or have the two separately. Either way, you will be able to manage your finances. Checking accounts allow you to access ATMs, deposit and write checks and make automated bill payments.

Even as you utilize these short term investment avenues, your overall aim should be to go long term. You can find lots of financial information including saving and investment tips by visiting www.moneyandmarkets.com


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