Long Term vs Short Term Investments

How Do You Determine a Long/Short Term Investment?

Usually, short-term investments are investments held for less than 1 year, while long-term investments are usually held for 3–10 years.
When making a long-term investment, you will probably be looking for an asset that you believe is undervalued or has a lot of potential for the future. Therefore, buying and holding this asset will probably bring you gains over the course of a couple of years.
When making a short-term investment, you will probably be looking for arbitrage opportunities or quick flips.

Long-Term Investment Pros and Cons

Pros:
- Long-term investments are usually less risky than short-term investments
- You can buy and forget as you are looking at the long run, you don’t need to continuously monitor the market to profit
- Gives you the opportunity to take advantage of both short-term and long-term growth
- It’s the easiest way to grow wealth, with real examples (Warren Buffet, Charlie Munger and more)

Short-Term Investment Pros and Cons

Pros:
- Your money is invested for less time, enabling you to do more trades and have more liquidity.
- If you are doing really quick trades, it is lower risk than long-term investments

Conclusion

Overall if you ask me, I think I would prefer a medium-long term investment. First off, I’m not really a professional fulltime investor who has time to monitor the market 24/7, and personally I like to create more value for the economy and actually contribute and witness a company’s growth. I think long-term investments are way more stable than short-term investments, with less volatility in total.

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The Crypto Enthusiast

The Crypto Enthusiast

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Writing all things crypto… Disclaimer: None of my articles are financial advice, please be responsible with your funds and always DYOR!