What is short-term investing?

Investment is usually divided into long-term and short-term. A long-term investment strategy is based on the fact that we need to set a long-term investment goal that we will pursue for 10 years or more, for example, our own home, pension, children's future, etc. When choosing this strategy, you need to accept the idea that the invested money should be forgotten for the investment period and not prevent them from working for a longer period of time. Such an investment strategy is popular among those who invest in shares, bonds and other investment instruments. However, there is also a completely opposite investment strategy - short-term investments.

 

Short term investment

Another investment strategy is short-term, where the available investment goal is up to several years, and in most cases up to a year or less, because we know exactly when and for whom we will need the money. For example, you want to save money for a holiday trip, a new car or a more expensive purchase. It is advisable to choose short-term investment when the long-term investment strategy is not suitable - you will need the money in the course of several years and you know that you will not be able to leave it for investment for a longer period of time.

 

Both the first and second investment methods have their own advantages and disadvantages, before choosing one of them it is important to evaluate your goals, expectations and opportunities. We will discuss the features of short-term investing in more detail so that you can more easily understand whether such an investment is acceptable for you or not.

 

 

Advantages of short-term investing

Both long-term and short-term investments have advantages and disadvantages.

Short-term investing allows you not to freeze your savings for a longer period of time, because you invest up to several years, so it is easier for you to plan your cash flow and it is easier to plan when your money will return and when you can use it. Also, when choosing short-term investments, you have the opportunity to react more flexibly to market conditions and reinvest them in the same or other investment instruments when the funds return.

 

Disadvantages of short-term investing

In most cases, investing in short-term investments involves greater risk, not always, but in most cases, short-term investments provide the opportunity not only to earn more, but also to lose your investments more often, because the indicators of the country's economy and the time when you buy and sell your investments are greatly influenced. In contrast to long-term investing, because over 10 years or more, economic cycles turn and short-term shocks have less and less impact on investments.

 

Short-term investment methods

There are various short-term investment methods, in this way you can invest in shares, cryptocurrencies, loans and other investment instruments. When it comes to short-term investing, it is necessary to distinguish between speculation in the investment market, because such actions are different from short-term investments and are a very risky way of investing. It is also called trading when you try to buy cheap and sell expensive. In the case of stocks and cryptocurrencies, one tries to guess when the value is undervalued, i.e. when the price is lower than the real value and sell when the price of shares or cryptocurrencies has reached the peak of the price - is valued in the market more than the real value, another way is when investors think when the shares have already reached the maximum value of the shares and in the near future the value of the shares will fall. This speculative investment method is quite well-known and popular due to the advertised fast and easy money, but it is usually not appreciated that people who engage in this activity take a high risk of losing their investments and being left with zero, because the markets are unpredictable, and especially when speculating on investment instruments. However, we will talk about real short-term investing, when investing for a few years or less and not speculating on the markets, hoping that the value of the instruments will rise / fall, and not trying to guess when the best way to buy or sell the investments you have is.

Short-term investment is possible through crowdfunding and P2P platforms that provide loans to individuals and legal entities, and the duration of the investment depends on the duration of the loan, for example, on the Profitus platform you can find projects with a duration of 3, 6 or 9 months. This project duration varies, as projects are financed from 3 to 36 months. for the period.

 

 

 

P2P Investing - What is it?
This is a method of investing, when investing in people's loans, i.e. money is lent to individuals who use that money for their own needs. There are various reasons why people borrow - they want to refinance their obligations for quick loans, it is easier to get a loan than in other financial institutions, they need money and have nowhere to get it. As investors, borrowing from other people through P2P platforms allows us to invest and choose whether to invest in short-term or long-term loans.

 

Investing in business loans secured by real estate

In contrast to P2P platforms, on crowdfunding platforms you can lend not to individuals, but to legal entities, and in this way you will invest in business loans with real estate collateral. By choosing this investment method, you can invest from 100 euros and contribute to the financing of real estate projects. Business loans have various purposes: for the construction of residential houses, apartments or apartment buildings, loans are available for refinancing, and crowdfunding is increasingly being chosen by the owners of commercial projects. Although there are many types of business loans and they differ in their duration, but in most cases the commitment lasts up to 12 months, which is a relatively short time, so business loans are an excellent choice for short-term investment.

 

 

Investing in property rental projects

When looking for short-term investment opportunities, it is also worth considering investing in property rental projects, because different investment methods help to break up (diversify) your investments and thus reduce the risk of the investment basket. Financing of rental projects is a type of investment where you contribute to the financing of the project, and its purpose is rental, for example, the owner of the project seeks to borrow funds for the complete decoration and furnishing of the apartment, after which he intends to rent out the apartment and repay the debt and interest from the rental income. This method of investment has the advantage that after the real estate owner successfully rents out the apartment, he will have a constant cash flow from which he can repay the obligations. Such a short-term investment can be considered safer, because it is easier and takes less time to rent, rather than sell, the property at the desired price, so it is likely that the owner of the project will be less likely to face difficulties in having funds from which to repay the loan.

 

 

 

How to choose a P2P investment method?

There are various investment methods, each investor should choose the method that is most acceptable to them. When choosing an investment method, we recommend taking into account your risk tolerance, investment goal and investment strategy. Also choose whether to invest for a short or long period. After answering all these questions, we invite you to choose the best investment method for you.