Investments usually give a maximum probability of increasing the returns the longer we hold. The longer we hold the investment, the better will be the yields (Returns). Investing for long-term implies that one is ready to hold that for at least a year or more than that. Short-term investments implies that the investment is for a year or less than a year. One has to decide which type of investment based on his financial status, goal, age and risk associated with them.

     Each and every investor has a different approach to investing and hence to reach that goal, one has to choose the asset type wisely. Based on the financial goals, plan your long-term and short-term investments. You can take help from financial planners to prioritize the investment based on your financial goals.

     Let me tell you that retirement planning and buying a house is a long term investment as an example. There are several risks associated with investing in the stock market, that is the reason the short term investment is considered risky while the long term investment is consistent and profitable in the long run.

Short term investment:

     Short term investments are held for months not in years. The day traders come under this category of investing. The risk associated with the investment in short term is comparatively less than long term in some of the assets. The time span decides the return on investment as well. The most common examples are mutual funds, treasury bills, commercial papers, stocks, bonds, etc., These short term investments are preferred by investors who are interested in capital preservation and medium returns. For short term capital gains in equities involving intraday trades, BTST or equities trading by holding it for less than 1 year, one need to pay a tax of  15% on the capital gains you have gained in the investment period.

Long term investment:

     The most important part in the long term investment is the compounding effect. For long term investments one doesn't need to time the market, enter at a decent price and can hold them in the long term. Long term investments can help you stay mentally fit and emotionally strong  irrespective of the market movements. The market is cyclical and will recover in the long run. When you decide the time span of the investment, decide the longer you hold the more riskier the investment becomes. Consider investing in a more diversified portfolio in the long run. According to section 10(38) of the Income tax act, you can get tax exemptions on capital gains derived from equity that are held for at least one year.

How to pick the right investment for Us?

     One should always plan their investment based on the situation. To pick the right investment one has to pick the goals they are looking for. My suggestion is to set aside capital for both the investment. Investing is an important wealth creator and all should be invested. We at pickright, will help the investor to choose the good investment by analyzing his risk appetite, goal, capital and other situations. If you are younger and financially stable, you can go for risk associated investments. These can pay well in the long run.