When you engage in the investment market, you may be faced with two options to sustain your retirement investment—namely the short term and the long term ones. Which one becomes more lucrative? Depending on the market trend, you may face different aspects to further your goals as an investor. In every investment transaction, you should take into consideration how long term and short term investments differ and how they relate.
Buying Low and Selling High
This fundamental of investment allows you to profit best when it comes to whatever field of investment you engage in. The difficulty of this is that you may find it difficult to transact things at the prices you wish. Some people charge too high for you to purchase low. Others even fail to adhere to your prices when you wish to sell high. You should prove your investment’s worth by engaging in short term and long term goals.
Short Term Goals
This form of investment lies around a span of only 2 to 4 years. This will help you understand the market trend in that span to buy at lower prices. Selling at higher prices within this timeframe can be difficult because the trends haven’t evened out yet. Once you are lucky to find someone to transact with, you should keep the capital appreciation around 30% to profit well. Next, your overall cost of transaction should fall between 7-8 percent in order to give you an investment advantage with an outlook of profit.
Long Term Goals
The popular choice among investors, long term investment occurs within a period frame of 10 to 15 years. When you engage in this form of retirement investment, there are two factors you should consider—inflation and population growth. This will affect the supply elements of the stock market and as a result, your pricing shall be affected. The inflation becomes more stable within this time frame and you can look for more lucrative results through long term investments.
How they Relate
Short term goals and long term goals intertwine to make a healthy retirement investment. Short term goals should be considered the basis of a long term goal because you take into consideration the present conditions of the market. Once you develop this notion, they become long term investments whose inflation rates have evened up, creating an investment opportunity that will profit you. The dynamics of long term and short term investments have a value that each investor should concern himself or herself with.
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