In choosing an investment period some people prefer short term while some prefer the long one knowing the right term to use in investment could help with your financial capacity, how will I know the period that would fit me?
In choosing an investment period some people prefer short term while some prefer the long one knowing the right term to use in investment could help with your financial capacity, how will I know the period that would fit me?
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This like many investment questions depends on the goal of investment. However, on a general level, long term investments are better than short term investments for a number of reasons. 1. Interest accrued 2. Compounded interest 3. Usefulness of money saved for a longer duration Most investments accRead more
This like many investment questions depends on the goal of investment. However, on a general level, long term investments are better than short term investments for a number of reasons.
1. Interest accrued
2. Compounded interest
3. Usefulness of money saved for a longer duration
Most investments accrue interest based on scale and duration. The longer the period of investment, the more the interest accrued. This in itself is a major advantage of long term investments.
Furthermore, compound interest is another interesting angle. The more funds added to a capital used in investment and this lump sum reinvested, the more exponential the final fund realized after a period of time. This is the 8th wonder of the world supposedly according to Albert Einstein.
To finalize, let’s look at ordinary benefit of saving money for long periods compared to shorter periods. There is money for a rainy day preserved that could have otherwise being spent on frivolities and non pressing requirements. This is self explanatory.
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