However, there is a case for short-term investing as well. “Short-term” can mean anything from several months to two years. Short-term investments are generally characterised as either low yield or high risk, depending on which end of the risk spectrum the investment lies. Short-term investments can be turned into cash or rolled over into other short-term or long-term investments. Investors have short-term requirements and aspirations which need to be fulfilled in the near term. What an investor needs to ensure is that short-term requirements do not derail their long-term investment plan. The paradox in short-term investing is that one might require higher returns to meet near term goals. This encourages investors to invest in high risk instruments in the short-term. However, this is an absolute no-no. The key is to have a short-term investment strategy within a well-diversified long-term investment plan. Short-term investing cannot be ad-hoc in nature. Like other investments, these also need to be planned and aligned with an investors goals and objectives. Create a financial plan that maps out the need for both short-term as well as long-term funds and then arrive at investment avenues to meet these requirements.