This is the third post in our five-part series on investing. In Step 1, we discussed why you should make investments. The second post deals with when you should start investing. If you’re new to investing, check those two out as well. Today, we’ll consider the question of how long you need to remain invested. Regardless of what type of investment you choose to make, the answer will depend on what you need from them.
With investments, there’s no one-size-fits-all rule. Every decision depends upon you. Your financial goals, stability, lifestyle and unique needs are primary considerations for selecting the right investment vehicles, as well as the term for each one.
Fortunately, today’s market offers an endless range of choices for everyone, so you can pick and choose exactly what works for you. With a short-term mutual fund portfolio, for instance, you can enjoy stable returns over as little as 1-3 years. If you’re investing towards a financial goal that’s just around the corner, like a new car or your kid’s college expenses, this could be the perfect option for you. If your goal is further away, such as setting up a business or saving for a comfortable retirement, a diversified long-term portfolio ranging over 3 years is better.
Time and compounding mitigate risks in the long haul, giving you higher returns down the line. It may be tempting to opt for short-term investments just so your money isn’t ‘tied up’ for very long, but unless you really foresee a need for liquidity any time soon, leave it invested as long as possible.
PLANT THE SEED OF FINANCIAL SECURITY TODAY
Investments grow over time the same way that plants do. Ever planted flowers? You put seeds in the ground and soon enough, a few pretty blooms emerge. Now, you could cut off the stems and put the flowers in a vase, but they won’t last more than a few days. If you leave the plant to grow, the plant will bloom for weeks or months, and even yield new seeds that can be replanted. Treat your money the same way. Think about what it has the potential to become, not just the immediate value you have assigned to it. But everyone’s different, and so are their investing needs.
Maybe a vase with flowers is what you need right now. Or maybe you already have a garden, but don’t want to dig it up for that one time you may need to fill a vase. Figure out what you need from the ‘seed’ you’re planting. Pinpointing your requirements is the first step to smart investing. Knowing how different options work over different time frames comes next. When you’re armed with this information, choosing how long to remain invested becomes almost a no-brainer, we swear!
Smart Lifestyle Smart Money September 21, 2023
Mastering Your Finances: Unleash the Best Budgeting Method for Your Personality
Budgeting is a crucial aspect of financial well-being. It’s not just about crunching numbers; it’s about aligning your financial strategy with your unique personality and preferences. In this blog post, we’ll explore budgeting techniques tailored to different personality types, with a special emphasis on the keywords “best budgeting method.” Whether you’re a free spirit, a … Mastering Your Finances: Unleash the Best Budgeting Method for Your Personality
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Gold Investment Plan: How to start investing in gold with just rs.100?
Ankita: Hey Shreya, have you ever considered gold investments? Shreya: Gold investments? Don’t you need a bigger budget for the same? Ankita: Not anymore! You can start with just ₹100. Shreya: Seriously? Can you give me more information? Ankita: Yes sure! Check out this blog by LXME titled, “Gold Investment Plan: How to start investing … Gold Investment Plan: How to start investing in gold with just rs.100?
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Restarting Your Career After a Break: Tips for Success
Many women go through a career break for a number of reasons. It can be to support their partner by moving locations or to take care of their little ones. A career break is just a pause button that can be restarted whenever you feel you’re ready. However, the time in-between and during this break … Restarting Your Career After a Break: Tips for Success