best short term investments for2011
Best Short-Term Investments for 2012
Here is a brief, yet elaborate, explanation of some of the best short-term investments for 2012, which can solve your liquidity issues in the near future.
- Such investments, on an average, have a time period that spans from 1 to 5 years and in some cases, even 7 years.
- Such investments have an average rate of return of about, 5% to 9%, with most investment channels providing about 6%. Other than that, the return on investment for shares, options, commodities and bullion is unpredictable; it can be more than 100% or it may even be negative at times.
- These investment options usually have a one-time payment or for a few of them, this would be your initially invested principle.
- Investments can be segregated into high-risk investments and medium-risk investments. There are a very few selected ones, that offer a zero risk of return.
- Last, but not the least, rule of thumb is that, the more you invest, the better would be your return on investment and the net asset value, if you invest smartly of course.
- It must be noted that really short investment funds do not offer a guaranteed minimum return clause, and instead the returns depend completely upon the portfolio, market and economy performance. An example is mutual funds.
- In case of longer time periods, such as 5 to 7 years, a guaranteed minimum return clause is added, meaning that you will get back all your principle invested amount, plus a return on investment of about 5-7% and in addition to that a bonus, which depends upon the portfolio, market and economy performance.
- The loading charges and commission charged on these investments is usually very low, up to 1-2%, though in some cases, it might go up by about a couple of numbers, but on the whole, it would remain low.
- Stock Market: A stock market is a great place to make a very risky but calculated profit. Enter at your own risk, as the probability of losing money is high. Hence daily research and update on the stocks in which you invest in is necessary. I would also recommend you to ignore the 'more the better' rule in this one. In the volatile market scenario, that could characterize 2012, only invest in solid stocks, which have a sound financial basis.
- Bullion: The second brilliant option is gold or silver bullion. Such bullion can be purchased in government minted form and can also be brought in the form of certificates. Just like in the case of stocks, you will need to watch the sale and purchase price. However, right now gold has peaked already and is falling rapidly as of now. It's a seller's market right now, wait to invest in gold, till the price has fallen down enough and start rising again.
- Funds: There are some professionally managed funds such as common mutual finds, annuity contracts, Short-Term Investment Funds (STIF), Collective Investment Schemes (CIS), etc. All you need to do is invest some money into these plans, sit back and enjoy the returns. The best thing about these investments is that they have a pretty good, fixed rate of return over investment. Apart from that, you also have the benefit of bonus and profits gained by a very well performing portfolio. The drawback is that the sum that you would need to invest is pretty large.
- Debentures and Bonds: Apart from share and common stock, companies and corporations also use some instruments and securities such as bonds and debentures. Both these bonds and debentures are 'i-owe-you' instruments wherein, you would have to deposit certain amounts with the company and let the interest accumulate on it. The entire sum is then returned upon maturity. Note that some of these securities are publicly traded through stock exchanges.
- Government Provided: The best government granted investment channel for investing for a short period are government bonds, which are issued by state, and federal government and in some cases by departments such as treasury and defense. These bonds and certificates have a time period of about 5 years and they tend to offer really good return on investment.
- Bank Provided: Bank provided investments include some Certificates of Deposits, I-Owe-You instruments such as bonds, fixed deposits, recurring accounts and prolonged cash back plans. Such investment options provide an assured return and it is a great way to utilize the cash which is lying around.