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Long-term Investments and Short-term Investments

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Long-term Investments

Long-term Investments and Short-term Investments. The different types of long-term investments have the advantage of being flexible and fairly profitable, regardless of the degree of risk tolerated. However, should you rely solely on the returns of these investments to determine your investment choice?

Why choose a long-term investment?

A long-term investment designates by definition a financial investment with a duration of 10 years or more, carried out on an investment medium such as a savings book, a savings plan, or a stock market portfolio. This type of investment is distinguished by its ability to smooth out the risks associated with financial fluctuations and thus offer a relatively substantial return, regardless of the length of holding.

Just because you can be sure you are enjoying significant income does not mean that all long-term investments are suitable for your investor profile. The choice of your long-term investment must take into account several parameters concerning you, including your investment objectives, the desired taxation as well as your investment capacity.

The different long-term financial investments

Knowing these principles, you have the choice between several long-term financial investments, grouped into two categories. The first brings together long-term investments with guaranteed capital, such as home savings or life insurance on euro funds. Life insurance is best for you if your investment objectives are to build up capital or an annuity for retirement or to pass on an estate to your descendants.

Home savings are more appropriate if you plan to take out a home loan under preferential conditions. The second category includes financial investments without guaranteed capital. Investments in stock market media as well as multi-media life insurance, including bond or equity media, are part of this.

Short – term investments

There is no shortage of different media for investing your money in the short term. How do you find the right product among these investments? Follow the guide.

Short-term placement in principle

Any financial investment lasting less than 24 months is included in the current definition of short-term investment. Several investment vehicles exist for such hoarding. Short-term investments, to be advantageous, must offer high-interest rates, not without being accompanied by flexible access conditions.

It is also better to turn to a short-term investment exempt from fees – or with low charges – or taxes, rather than subscribing to an account or savings book whose management fees undermine profitability. Taking these criteria into account, a few investment vehicles stand out.

Which short-term investment to choose?

Among the most advantageous short-term investments are primarily savings accounts, mainly those offered by banks and which are taxed. These products have the particularity of offering very high rates of remuneration during the first months – ranging from 3.5 to 4.5%, or even more. The capital paid into the account during this period of time is therefore subject to this rate of remuneration. Note however that the yield of these “super-booklets” falls to a level close to the regulated booklets, after the promotional period. The term account and the interest-bearing account are just some of the other short-term investments that offer significant returns, on condition that they are subscribed to with a banking establishment whose service charges are reduced or even zero.

Hello, I have been working as an investment consultant and author for more than 20 years. I love what I do and I have enriched everyone around me. A lot of money is not important, the main thing is how you use the money.

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