The 4 Best Ways to Invest Short Term Today
You’ve probably considered investing at some point. While most people advise you to begin investing in your early 20s, it’s never too late to start. We’re going to look into 5 ways you can invest for short term.
When investing, you usually have one major decision. Do you invest for the short term or long term? For both of these, you need to decide what kind of returns you are going for and how much risk you are willing to take.
Investing for short term high returns means the investment will mature in short periods of less than one year to three years and probably give you 7% APR or higher annually.
In a world dominated by unstable market conditions, most investors prefer shorter investments that yield higher returns. Long term investments can require a much larger degree of trust.
How to invest short term money for high returns
Classically there have been many places that Americans could throw their money for a few years to get a safe, and reasonably-high ROI. These included things like:
- Savings accounts
No longer. While putting money in places like these is definitely safe, you’ll make under the 2% inflation rate, effectively losing money. If you want high returns short term these days, you need to take on some risk.
Crypto assets have generated a lot of interest in recent years (pun intended), thanks to their highly volatile nature and potential for high returns if you can read the charts. Additionally, their digital nature makes them great for global transfers making them highly lucrative for investors.
- Can yield frequent high returns (10% or more).
- Not affected by the same market forces as traditional securities.
- Highly volatile. You can easily lose a ton of money on a bad trade.
- Largely unregulated, there are many scam currencies and insider trades.
Many investors in the US and around the world like to invest in the stock market short term. This can range from day trading to short weekly trades. Stock trading can vary drastically from stock to stock.
Some stocks trade in large bundles called ETFs (Exchange Traded Funds) that move very reliably. However, low-cost stocks called “penny stocks” can fluctuate wildly in price.
- You can make significant profits in a short period of time.
- Highly liquid.
- Us traders have lots of tools at their disposal today.
- Extremely hard to predict stocks short term. Companies can be very steady over the course of a year but highly volatile in a week.
- Your emotions will normally have a high impact on how you day trade.
- Very stressful in the short term.
Derivatives are financial contracts that operate completely on the secondary market. They get their value from financial instruments, market indexes, or even commodities like gold and oil.
Because derivatives rely on the performance of an underlying asset, they are considered high risk and highly volatile.
- Grants average investors access to high levels of interest from other markets.
- Highly speculative, a poor derivative trade could cost you much more than you ever expected to make.
- Derivatives are extremely complex.
Peer-to-peer lending (P2P Lending)
Peer-to-peer lending is perhaps the best way to invest money safely for the short term. With P2P investing, you lend money to an individual borrower, and they pay you back with interest.
Interests vary from one P2P platform to another. Most P2P platforms will offer a wide range of loan options so you choose how much risk you are willing to take.
- Decently high returns.
- On most platforms you can quickly liquidate your investment.
- Allows you to choose your level of risk.
- Investors face a risk of borrower defaults with no returns.
- Many platforms require at least one year of investment.
Understanding short term investments
When looking where to invest money for the short term, keep in mind that most short term investments are made with a specific goal in mind. For instance, you’re investing to make the down payment of your dream house or traveling the world during your honeymoon. Not saving for a rainy day.
When looking for options for the best place to invest short term, you must first define the risks and returns you are going for. As a rule of thumb, higher risks equate to higher yields.
Most investments tend to show higher yields over a long period of time. 7% of $1000 over 1 year is $70. For 10 years, it’s over $280.
Most short term investments can (and should) be made with just a small portion of your portfolio. We made a guide previously on investing with as little as $10,000.
Get reliable returns with a short-term investment on MyConstant
MyConstant is a P2P lending platform that boasts some of the most cutting edge financial tools in the world.
You can invest your money for periods as short as 30 days and receive up to 7% APR. These high returns make it the best place to invest short term. You can also invest idle cryptocurrencies for 9% APY through our crypto lend feature. We also provide collateral back up, making your investment more secure. Come see what we’re all about today.
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