| There are many persons that run towards stock | | | | instruments. This offers more security than |
| investment as a means to make some quick | | | | stocks in the short term. |
| money. This is perhaps however not the best | | | | So how long is considered short term? Many |
| investment option for persons with short term | | | | persons are under the misconception that short |
| rewards in mind. The best option when thinking of | | | | term means less than a year but this is in fact |
| investing in stocks is if you are interested in | | | | not so. In terms of stocks short term is |
| accumulating funds over a long period of time. | | | | considered to be five years or less and some |
| One such example is the investment for future | | | | persons will recommend more years rather than |
| needs such as a nest egg for retirement and so | | | | the minimum of five years. A good rule is that if |
| on. | | | | you are going to need your funds in the next five |
| In stock investment both short term and long | | | | years then stay away from stock investment. |
| term investments come with risks attached and | | | | Another point to note is that unless you are an |
| therefore nothing is truly guaranteed in the stock | | | | active trader then short term investments make |
| market. Today could be very good and tomorrow | | | | no sense. If the funds being used are for |
| very bad resulting in great gains or great losses | | | | retirement investment then being an active trader |
| as the case may be. However, in terms of long | | | | is also not recommended. |
| term investment, it is shown according to | | | | The average down time for some markets is a |
| statistics that there are no 20 year portfolios that | | | | year but this has been seen to last much longer a |
| have lost on the stock market. The average | | | | well so though for a long term investor this |
| returns have averaged about 10 percent and | | | | downtime may seen to be a lifetime it will pass |
| these accounts all have a broadly diversified | | | | but if you are a short term investor you will lose |
| portfolio of stocks. | | | | a lot depending on the market fluctuations. Stock |
| In the short term the market is very risky. The | | | | investment will offer many great opportunities but |
| market will go up and then go down so if you are | | | | can be devastating for a short term investor. If |
| only thinking of investing for a short period then | | | | you know that the funds you are investing will be |
| this is not the best option. If you are nearing | | | | required for use in a short time then choose |
| retirement age and now beginning to invest in | | | | investment options that are more secure and |
| stocks this is not a good option. The best option | | | | protected. It is true that you may get lucky and |
| in these cases as a protection against inflation, | | | | make a fortune but it is also true that the risks |
| rather than stocks, is to invest in stable | | | | are high and that you can lose everything. |
| investments such as bonds and other cash | | | | |