COMPARISON OF LONG TERM INVESTMENT AND SHORT TERM INVESTMENT

Investment is a term which is generally used by those who have surplus amount
of money that has been left after fulfilling all of daily needs. However this is a very
general definition but from business point of view, investment is something that will
give you more output in the future if you spent some money at present. Generally
there are two types of investments. These are long term investment and short
term investment. The basic difference between both of them is the duration which
is fixed and after which, the output is likely to be obtained in more expanded form.
If we talk about short term investment then it is concerned with small duration. In
general language, It is said that if you want to make good amount of money in small
duration of time then this type of investment should be given priority. Example of
such type of investments are investment funds, treasury bills etc. However, long

term investment is concerned with the investment in which output is likely to
be obtained after long period of time. The example of this type of investment is
recurring deposit, retirement plan for future etc.

If you are saving your money from the current expenses and wishes to make
some investment so as to get some expanded output in the future in the form of
retirement fund or for your children’s education then you should not go at those
place where you may be deceived financially. However you can simply choose
some of the secure paths that will surely provide you with some well-brought-
up output in the near future. Hence in such case long term investment plays a
vital role as numbers of schemes have been opened by government bodies along
with some private bodies. The basic scheme is concerned with the purchase of one
bond issued by government. According to the type of your purchase bond, your
initial investment will grow up over time and at last as soon as your bond collapses,
you get the entire amount as a lump sum that you can simply bring in any use.
Mutual fund is another type of secure scheme under long term investment. This
is basically concerned with the purchasing of stocks or bonds by putting money
together from numbers of peoples and then it is the responsibility of fund manager
to manage all the investment and also to figure out the appropriate method in which
the investment can be done so as to get maximum output.

However, short term investment is something that brings about an output against
your invested money within a short span of time. However, this period may be
varied from one year to ten years. Also these types of investments are very rare and
difficult to find as these are likely to be associated with higher rate of interest. For
an ideal short term investment, interest rate has to be higher because firstly it gets
you the return amount in the form of out and profit within short duration of period
and hence higher rate of interest need to be paid to the company so as to reach some
profit to the company as well otherwise that company will go into the hell.