What are Short-Term Investments?

Short-term investments are assets that can be converted into cash or can be sold within a short period of time, typically within 1-3 years, according to Corporate Financial Institute.

If you are looking to invest for the short-term, you are probably looking for safe investments with above average interest rate or mutual funds and other performance-driven investment products with outstanding performance history. Highly volatile market and falling economies of many countries became a reason to hold the cash for investors. These factors are driven mainly by the coronavirus crisis, and 2021 still remains uncertain. However, most of stocks and mutual funds surged, and the amount of Assets Under Management significantly increased.

The most importants thing that investors seek when investing cash for the short-term are safety and liquidity. High liquidity ensures immediate access to invested funds without or with minimal losses. The risk factor is also important when making short-term investments, so potentially risky investment requires deeper research in order to reduce the risk and achieve the results.

Short-term investment options

Short-term investment options

If you are looking to make a short-term investment, more likely you are expecting to have access to invested funds at a certain date. If you are saving for a down payment on a car, house or some event, the funds should be accessible by target date. Investments for up to 3 years period are considered as short-term investments.

If you seek to invest with longer time horizon, you can consider choosing low-risk investments, such as Treasuries or Corporate Bonds. If you are prepared to take more risk, take a closer look at stocks and mutual funds.

Most of short-term investment options are not considered as high yield investments. However, there is a broad range of investment opportunities to invest for short-term and generate high returns.

Savings Accounts for short-term investing

Savings accounts are the most liquid options to invest for the short-term. It’s a good alternative to holding the cash in a current account and get guaranteed low interest rate. Savings accounts are considered as the most secure investment option¬† for short-term investing. The funds allocated at savings accounts are insured, so you won’t lose the money.

Money Market Accounts

Money Market Accounts offer a higher yield than savings account, but usually require a higher minimum investment. However, interest rate will not beat the inflation, but it doesn’t have so important value for short-term investing.

Cash Management Accounts for short-term investing

Cash management accounts enable investors to allocate the funds in a selection of short-term investment products. Cash management accounts are usually provided by online stock trading platforms and brokers. The good benefit is that money can be withdrawn anytime. Cash Management Accounts are significantly better because of no limits for monthly withdrawals compared to Money Market Accounts and Savings Accounts.

Short-term mutual funds

Short-term investments in Mutual Funds

Investing in Mutual Funds for the short-term is a good idea if you are ready to take the risk. There are mutual funds that offer quarterly and monthly income distributions. This absolutely matches the investment objective of short-term investing. Mutual funds are performance-driven financial products, so you need to select the product that fully matches your risk profile and financial goals. If you are ready to take higher risk, you should consider investing in crypto investment funds as well.

Risk & Performance

Please keep in mind that past performance is not a guarantee of future returns. Top-performing mutual funds can generate impressive returns from 15% to over 50% yearly, but a high risk is involved in such type of investments. The value of mutual fund may fluctuate, and there is a risk of losing part of your capital when investing in mutual funds, so it’s recommended to build a diversified investment portfolio and segregated it by risk. The older you are, the less share of your assets should be invested in high-risk financial instruments, including Actively Managed Funds.

Investment Minimums and Onboarding

Einvestment is one of the modern, cost-efficient and time-efficient wealth management companies with digital-first approach. In order to start investing, you just need to open an account on the website, completed paperless identity verification procedure and electronically sign your subscription agreement. The entire process takes less than 15 minutes, while investment minimum is just 1,000 Euros.

Fees & limits

One of the main benefits of Einvestment is flexible fees policy, where investors pay only performance fee. There are no limits on income withdrawal, no entry fees, no management fees and no annual fees. In addition to above mentioned points, retired investors can invest for retirement with reduced performance fee of just 15%.

Notice: Performance fee is the fee that is charged from positive returns. The fee is charged from generated return, then remaining amount is distributed to investors.

Short-term investments with Ethical Funds

ESG and Ethical Investing enable investors to invest in line with their values. Portfolio managers at Einvestment fully support global ESG transformation, and do not invest in companies that have harmful impact on environment and society, but put more emphasis on technology and green energy companies strived to make the world a better and safer place for everyone. If you are looking to invest in ESG funds, the products of Einvestment suit you as well.

 

ESG-compliant investment products also generate high returns in addition to investing in a better world. Sustainable investing also known as socially responsible investing (SRI) is now becoming increasingly popular, especially among millenials.

How to get more from your savings?

There best way to enhance your returns is to choose offshore investment products offered by offshore mutual funds and wealth management companies. Investing offshore gives additional tax benefits through allocation in a tax-efficient jurisdiction. Short-term investments with onshore and offshore mutual funds can be a good idea if you select the fund with frequent income distributions. For example, Einvestment Fund offers a selection of broadly-diversified investment products with outstanding performance since it’s inception in 2018.

Einvestment mutual fund platform powered by Einvestment Fund offers immediate access to top-performing investment products that deliver monthly income in line with investor’s objectives and risk tolerance. For the moment, the Fund has over 230M Euros in assets under management. Top-performing portfolio has generated almost 320% total return since inception as at July, 10th, 2021.

More information: Please compare investment options to select the one that matches your financial goals.