Short-term investment is made when an individual is interested in earning quick income from investments. In the case of the stock market, short term means at most two years. The stock market is not the right place to make a short-term investment because it is a limited period in which investors can make a lot of decisions. The decisions that are made within the short term, in most cases, reduce the income earned from the investments. On the other hand, it is mostly suited for long-term investment because it gives an individual a chance to buy into big companies. It is also essential to take into account that there are bad and good years, but if the investor is patient; it will provide about 10% yearly returns.
I agree that the stock market is the largest casino in the world because the market is full of uncertainties. Just like a casino, an individual has to be smart to know when not to invest and when to put their money. However, an individual may lose or get their money back. My preference for short-term investment is government bonds because they provide fixed incomes. For the long-term investment, I would put my investment into the stock market. In order to make the first strategy less risky, I would decrease the number of stocks. This would make me feel at ease even when I lose my investment. Increasing the level of stock increases the risk of losing stock. It is also essential that an individual invest in different companies offering different products. This reduces the risk of losing stock such that if a company’s product is not doing well, the other company’s products can still bring in income. If you compare this with investing in one specific product from one company, then the risk is too high. When the product does not do well in the market, it will affect the whole of your investment. `
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