Dividend Stocks

Investing In Stocks For The Sake Of Cash Flow

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An Insight into Investment Strategies

Posted on | September 3, 2013 | 5 Comments

There are many options for short term and long term financial investments that can offer you excellent returns. However some of them come with high risks that you need to be aware of.

Short-term investments can usually be recovered up to as quickly as a few months. Though the downside is the interest will be less than what you would typically receive with a long term investment.

Long term investments are beneficial because of their relationship between time and market volatility. Since the initial investment will last over a long period of time, it is not as vulnerable to the swings of the market, meaning there is a better chance profit.

The following are investment ideas that you should consider. If the right amounts of resources are used, they will secure you some type of financial stability.


Investment in Money Market funds

Money market funds are a stable short term investment. You can receive money back quickly as the shares can be sold at any time for their current price. The yield is also very competitive when compared with savings accounts that you can get from banks.

Such short-term investment also allows you tax savings, especially for those in the high tax bracket.  Companies like wonga.co.za provide payday loans in South Africa so that you can have the funds to make your small investment.


Do Your Homework

Before investing in stocks or in mutual funds, it is necessary to thoroughly research the market and select sustainable companies. Trading in penny stocks is also a safe strategy where you can reap significant profits. It is better to avoid funds that have high sales charges, as they can cut into your profits.


Investing in Commodities

You can invest in commodities, such as gold and silver and get good returns. This is especially true in times of recession, when the price of stocks and shares are likely to fall, but commodities continue to remain stable.


Investing in bonds

This is a viable opportunity for short-term investors, as it is both safe and steady. You can make investments in individual bonds by selecting them yourself or you can invest in a bond fund involving professional investors.

They have a research team for evaluating the best portfolio for you. Short-term bonds have smaller durations and are, in turn less sensitive to changes in the interest rates. You could also invest in bonds that have a short maturity period lasting only months or even days.


Forex Investment

This is a foreign exchange trading platform, where you can obtain returns from short-term investment. It involves buying and selling of currencies at the right time to make a profit. However, as there are some risks involved here, it would be a good idea to either educate yourself on the matter or consult with a professional before deciding to pursue this option.


Loan Participation Fund

This is a safe short-term investment option that is similar to a bank loan fund. The funds are invested in bank loans made to companies. In this case, the companies could be a risk for the bank in repaying the loan and hence, you can get a higher return for this kind of investment.