Boosting Portfolios and Terminating Risks

Boosting Portfolios and Terminating Risks Through Short Term Investments

In today’s present world condition, we can confidently say to ourselves that we are living in times of uncertainties. In the world of financial market, uncertainties spell doom to the future of someone’s investment. To get rid of these risks, investors can turn to short term investments, which are known for their ability to boost portfolios while mitigating associated risks. 

Short but Sweet 

Short terms investments are generally those types of investments that last for less than three years. Among its kinds are treasury bills, money market funds, savings accounts, short term bonds, and certificate of deposits, known for their ability to be easily converted into cash. 

With the recent waves of market uncertainties due to political jitters across the world and the directions of interest rates, a lot of investors have been lured to short term assets. They are known for their higher level of liquidity as such for savings account, where you can withdraw cash anytime using ATMs. 

People also take advantage of rising interest rates. In the United States, its key interest rates have been on a fast pace, making short term investments like savings account and treasury bills more attractive to people because it potentially increases the chance for higher returns. 

Moreover, in the United States, for example, short term assets are mostly protected by the regulations from the Federal government. This reduces the chances of losing the money, making their market value more stable. 

Futures day trading might be a good venture for short term investors. It is an activity where you place your positions at the opening and closing of the bell. Though it sounds easier, it takes a lot of discipline and knowledge to be able to maximize returns. 

Short term investments present unique opportunities to people and they are quite fit for investors who are afraid to take risks for long periods of time. Unlike long term investments, they are not a reliable reference for the future performance of an asset as they covered only 1-3 year period, which does not generate enough data essential for market analysis. 

The game of investments can be always tricky. Whether you prefer the short term or long term horizon, you can lose your money when emotions take over and wrong decisions are carried out. 

Short term investments have their pros and cons and markets have their ups and downs. Consider managing your portfolio efficiently while controlling your emotions and you can do well in a long run.

Source   Presented by GMOTrading
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