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Asset Preservation Advisors


State: GA

APA’s philosophy is to work closely with our clients to develop an in-depth understanding of their unique needs and objectives. We then customize a municipal bond portfolio that best meets their specific goals and needs. APA manages high quality municipal bond portfolios in four strategies: Short-Term, Intermediate-Term, High Income, and Taxable.

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Short Term vs. Long Term Investment: What You Need to Know

What are your financial goals? How long can you keep your money invested? The answers will shape your short term investment and long term investment strategies.

| BY Adriana Reyneri

What are your financial goals? Are you building a college fund for your high school senior? Do you hope to retire in 15 years? The answers to these questions will help you decide what short term investment and long term investment strategies to pursue.

A short term goal is less than three years away, according to the Financial Industry Regulatory Authority.  FINRA is a self-regulating agency that oversees the brokerage industry and provides investor insights to protect and inform consumers.  A short term goal might be accumulating a down payment to buy a house within two years, or saving for a special vacation to celebrate an upcoming 25th wedding anniversary.

“Because you plan to spend the money you set aside for short term goals relatively quickly, you’ll want to focus on safety and liquidity rather than growth in your short term portfolio,” FINRA said. Short term investment products include insured bank accounts, U.S. Treasuries and money market funds.

Medium term goals are three to 10 years away, according to FINRA and call for a balance between protecting and growing assets. A possible medium term investment strategy could include a mix of high-quality fixed income investments and modest growth investments, such as a diversified large-company stock fund. “Monitor the stock investments closely and be prepared to sell to limit your losses if there’s a major market downturn,” FINRA says.

Long term goals are more than 10 years away. According to FINRA, “The general rule is that the more time you have to reach a financial goal, the more investment risk you can afford to take.” Long term investment products can include individual stocks, stock mutual funds and exchange-traded funds (ETFs) investing in equities.  Other long term investment products, such as Real Estate Investment Trusts (REITS) and bonds, can be used to diversify a long term investment strategy.

“While past performance is no guarantee of future results, historical returns consistently show that a well-diversified stock portfolio can be the most rewarding over the long term,” FINRA said.

The willingness to accept investment risk declines with age, according to Millionaire Corner research on individuals with investable assets of $100,000 up to $1 million. As investors approach retirement they favor protecting their principal over growing assets, while younger investors – those ages 44 and under – show an appetite for risk, according to our research. Close to half (47 percent) indicate they are willing to take “significant investment risk on a portion of my investments in order to earn a higher return,” an attitude shared by less than one-fourth (22 percent) of investors ages 65 and older.

Whether you select a short term investment or long term investment strategy, said FINRA, “you’ll need to monitor the performance of these investments to see how they are working together in your portfolio to help you progress toward your goals.”