The length of time that you plan to invest your money is an important factor when choosing an investment and is based on when you need access to the funds and your risk tolerance. Short-term investments are generally held one year or less whereas long-term investments are held longer than a year. Short-term investments generally are more liquid meaning you can have access to your money sooner and also are less risky as the interest rate is not locked in for as long. However, interest rates are lower. Since the goal of a retirement deposit is saving for later, a longer-term investment can be the right choice, dependent on your situation.
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