If you looked at the headline and came to this page, wondering if we will talk about short term trading and show you fancy charts then sorry folks, we are still talking about “investing” not trading.
Investing for the short term
Short term investing is meant to serve the needs of short term money. It’s the money you will need in the next 1-5 years .For example:
- down-payment for your own home in 5 years
- Buying a new car 3 years from now
- An overseas family vacation next year
This money should not, therefore, be exposed to the fluctuations of the stock market. A bank RD or FD is what most people opt for. The best option though is something called debt mutual fund.
A debt fund is a type of mutual fund that invests in fixed return financial instruments such as corporate bonds, debentures, certificate of deposits, and government securities. Think of debt funds as the FD equivalent of mutual funds, only better.
The question of why debt funds are a better alternative when compared to fixed deposits is answered here in detail. The short answer:
#1. Pretty much same safety of your money as an FD
#2. No TDS.
#3. Much lower taxes on your earnings if you hold for 3 years.
#4 It’s easy to invest and withdraw from your debt funds - even small amounts like Rs 1000.
Debt funds are good for short term investing, Scripbox short term money is better
At Scripbox, we recommend a portfolio of three carefully chosen debt funds. We call this portfolio “short term money”, for obvious reasons.
The objective of this portfolio is to provide you with stable returns (current historical average of 8% or more) while allowing you ease of access to withdraw when you need the money.
So if you have any goals for the next 5 years, Scripbox short-term money is a smart way to go about meeting them. Check out how Scripbox short-term money has done in the recent past and start saving for your own short term plans.