There are tons of reasons why you would want to stick with short term investments, or head over into long term investment territory. Each has its pros and cons and there are different reasons for choosing either one. You will want to base your decisions off of the current market as well as the trends that are going on in the market. Some predictions will need to be made as well as taking some risks, but with any investment where you are giving your money up for a company to use, there is plenty of risk involved. True, there are also different kinds of investments, like stocks and cryptocurrency, but for now we will stick with the general term investment to explain the difference between long term and short-term investments.
So, what are the pros and cons of a short-term investment. Well, first you must realize that more preparation and research will need to have been done before you invest in the short term rather than the long term. Since you want to make money and not lose money, you will have to examine market trends much more carefully and plan out what value you will want to pull your investment out at. Stocks for example have highs and lows. You will want to determine, based on research, what the high should be in your short-term plan of owning the shares. If the stock value reaches this calculated high, you will probably want to sell off those stocks, since the volatility of the stock could drop its value back down. This is all based on short-term investing mindsets, so if you want to make money from an investment in 3 years or so, then these are the things that you will need to think about.
As for long term investing, well there is a lot less risk, but a whole lot more waiting involved. With the long-term investment mindset, you will watch tons of different things happen to your investment. There will be many high points, but also many low points. You have to remember that long term investments are usually a safer bet with your money, but that also means that the money you put in won’t be coming back to you for quite some time. You will have to do some research and base your investments on what you think will happen in the future. It is always smart to invest in new technology, especially the tech that you think will become mainstream in the future. The risks are that you could lose everything much later, and because you plan to keep your money invested in that company for a longer time, tons of things will change in the world. You have to always remember that the world is constantly changing and that new and better things are coming just around the corner, so investing in companies that have a mindset that looks to the future is the smartest idea.
You also have to remember to never invest money that you can’t afford to lose. You do not want to ever rely on investments to keep that money safe and sound, because every single investor will one-day deal with some sort of loss. You do not want to be that person who puts a ton of money in that you have saved up and can’t bear to lose, and then have the company you invested in mess up and lose everything. Never invest what you don’t want to lose, because when you lose it, that’s game over. Investments are a guessing game, but also have a deeper level of calculation and research planted into their core.
It is very smart to listen to some of the top investors, whether they are talking about short-term or long-term investing. They are the ones who know what it is like to successfully invest into others, and what kind of patience it takes to see that investment grow into profit for you. The goal is always about making money, but sometimes it can be smart to pull out of the market before things tank all the way. While markets always rise and fall, there are certain circumstances in which you may want to consider taking your investment out of the market and rethinking your plans, as things can change very quickly. If the company that you invested in 5 years ago is slowly sinking and the owners are negligent of this, then you may want to jump ship.