Planning your investments according to need is the most important online money investment advice you can receive. If you have a short-term need, such as one where money is needed within a three-year period, you will want different investments than you would have for a long-term need that takes place 20 years into the future.
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Short-term needs require two things when you invest. Liquidity when you need money and security. Since you only have a limited time, the higher risk investments that fluctuate dramatically can go down and not recover in time for your specific goal. This means that you will find another way to fund your project, either it often costs you on interest payments, or selling your investment for a loss.
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Those seeking Global investment advice find that stocks are not the way to invest for a short-term objective. No matter how stable the company looks, the stock price will fluctuate with market conditions. In a bad economy, the fall can make a difference between a profit and a loss.
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Bonds with an expiration date established within their period may provide a means of financing a short-term need. Do not be fooled into thinking that a traditional bond fund will do the same. The bond market goes up and down just like the stock market. However, a short-term bond fund, full of bonds maturing within a year, often has little fluctuation and offers a higher rate of return than traditional savings. Be aware of the burden if you invest in a short-term bond fund. The load can erode any gain you can see. Some funds offer a reduced or no charge if you leave the funds for at least one year. Other bottoms without load do not have the danger of higher loads.
Money market funds are also another way to achieve higher returns without the risk associated with stocks or other types of investment that fluctuate in price. You will never make a 20 percent return on your money, but you will often receive a higher return than you would get on a savings account. You can also find money market accounts with tax-free instruments if you are in a higher tax range. Since returns are tax-free, they are often lower, so make sure your tax group is high enough to make up for the loss of return if you use a money-tax-free fund.
Short-term CDs are also excellent ways to invest if you have a short-term goal. Note that there is a difference in bank CDs and brokerage CDs. The main CD of banks does not fluctuate, while brokerage CDs vary as do stocks and bonds. Often brokerage CDs are longer term and if you select one that comes due within a year, it will probably be stable. Even though the performance of a brokerage CD seems better, consider all the costs of the purchase before making your final decision. Ask for investment advice from someone you trust before investing in any product you do not understand.
Short-term notes can also be another good investment for goals that occur in less than three years. Short-term notes are usually less than one year and of several different grades. If you want security, look for the ones with the highest credit rating. If you want greater profitability, you can buy those with a little less than the best rating, but keep in mind, the lower the rating of the note, the greater the risk.
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