Differentiating Between Short Term And Long Term Investments

A typical short term investment is expected to grow for several months. If the investment is successful it can extend to a period of a few years, which is the ideal outcome for a short term investment. For an investment to become long term, the time periods are much longer — often decades.

Long term investments include real estate and cash, these slowly develop over much longer periods. But this isn’t necessarily a bad thing.

Because of the amount of time that long term investments occupy, they often leave room for many short-term investments. Examples of short term investments include individual stocks and mutual funds.  If you know you need the money back in the short-term, the stock market is a good place to be.

It’s important to remember that the long term investment account differs largely from the short term investment account in that short term investments will most likely be sold, where as long term investments may never be sold.