When determining how to invest, you may use a capital investment company. A company that deals with capital investments utilizes the acquired fixed assets that have a substantial life usage before it has to be discarded or replaced. These fixed assets can be used to invest in a horizon. The horizon is determined based on how long you have to sell your investment and what your investment goals are. Each horizon has a risk associated with it. It can be quite confusing if you are new to investing, but once you have an understanding of how the process works and risks associated with it, it should make your selection much easier.
There are three types of horizons associated with investing and each has its own level of risk. The first type is short. The short-term horizon is usually less than three years. The risk level with a short-term horizon is low. You must allocate your capital to funds that guarantee high returns such as a high-interest yielding savings account. The second type of horizon is medium-term. This type usually ranges from three to ten years depending on your needs. The risk level is medium and allows for greater flexibility in terms of deciding how to allocate your assets. The final horizon is long-term. The long-term horizon is ten years or more. Due to the term of this horizon, the risk is high. When using the long-term horizon, it is advisable that risky investments be included. With any of the horizons, the time changes based on what is being returned off the investment and your needs.
Your investment company should work with you to determine which assets can be used for investing. They should also suggest a variety options that you can elect to use to meet your financial goals. If you opt to use the short-term horizon, then your goals and expectations should match that of the time frame. Generally, those who utilize short-term horizons elect to use high yielding accounts and securities to guarantee the biggest returns on their investment. The key to making your assets work for you is investing at the “right” time. This requires you following the market and selecting a high performing account. In the case of high-yielding interest savings accounts, most lending institution post daily the interest being accrued. These types of accounts do not fluctuate in extremes, so the likelihood of being able to have a great return is great.
The great thing about horizons is that the time frame is not set in stone. Horizons can change by the minute or day. If you find that your selected horizon is not performing as you want or you want to have an investment portfolio that has a variety of investments options, you can do so. However, it is important to select the right investment term in order for your needs to be met. Switching up mid term can result in a loss or add to the time it takes to meet your goals.