I would call it timed categories.

Any of the known types of investments may fall under each of the categories presented. It is always important to correctly assess the situation in the analysis and not to confuse the medium-term with the long-term or vice versa.

Short term investments.

In the classical sense – up to one year. But in practice, it can be much less. For example: you lent a friend a sum of money to make him a profitable transaction and a month later he repaid your debt and shared the profit with you. Or they bought a car at an auction for the sale of seized property at a very good price, after that they put it up for sale and two months later they sold it with a profit of + 50%.

Medium-term investments.

Usually, this term refers to the period of return on investment from 1 to 5 years. In some countries, the amount of money received from renting a property for five years exceeds the value of the same property. This is an example of a robust medium-term investment. Also included here are: deposits for a period of one year, purchase of valuable metals, securities, investments in your own business.

Long term investments.

Investments made for a period of 5 years and above.

Own business, purchase of shares, long-term deposits in various funds, pension funds, insurance companies with long-term savings programs, purchase of real estate for resale in the future and possibly lease.

How to correctly determine the investment term in practice, how to pre-anticipate the risks of transition of a short-term investment into a long-term one, how to distinguish a medium-term investment from a short-term one. Read the article – investment term, analysis, definition and management.    

Thanks for the comments.

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3 thoughts on “Short, medium and long term investments”

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