Many people focus on long-term investments as the best way to grow your money, but that is only one way to balance your investment portfolio. Many successful investors, including entrepreneur Nicholas Kyriacopoulos, find that the smartest move is to maintain a balanced portfolio that includes both long-term and short-term holdings. Here are some things you need to understand when you build your portfolio.
Understanding the Difference Between Long- and Short-Term
Before you start investing, you should understand the difference between long- and short-term investments. Successful professionals like Nicholas Kyriacopoulos learned these details early on in their careers, and it has seen them through to the present day. Once you understand the distinction, you can carry this information through stocks, bonds, and futures alike.
Short-term investments are those that you want to buy and then move on from within a short period of time usually ranging from weeks to months. By contrast, long-term investments are those which you hold onto for a period of years or possibly decades. Investors like Nicholas Kyriacopoulos keep a balance of both options.
Benefits of Long-Term Investments
Long-term investments have many benefits, which professionals like Nicholas Kyriacopoulos use to provide their portfolios with a stable foundation. This type of investment carries a lower risk and has little or manageable volatility. That means that the market is less likely to shift in an unexpected direction. Even if your money doesn’t grow at the expected rate for a period of time, you can rest assured that it will likely bounce back eventually.
You can expect modest returns from your long-term investments. You won’t likely strike it rich with these alone, but they will maintain steady growth and allow you to plan on a reliable stream of gains every year. Nicholas Kyriacopoulos and other successful investors have used long-term investments as a good way to advance the goals of financial security and buoy riskier ventures.
Reasons to Include Short-Term Investments
While long-term investments certainly have their place, there’s a lot to be said for short-term investments as well. One of the benefits of these holdings is that they can generate faster returns over a shorter period of time. As the economy sees shifts that might not affect long-term markets, these investments will see greater changes. That’s one of the reasons that experts like Nicholas Kyriacopoulos make sure to keep an eye on these markets as they build and manage their portfolios.
If you keep an eye on the marketplaces, you can make a short-term investment just before the stock is about to surge. You can then sell at a point where the market reaches a plateau, ensuring that you can sell the stocks before they start to self-correct. This requires a good understanding of the marketplace, and it does carry risk. However, once you manage to read the market like Nicholas Kyriacopoulos, you can make sure to purchase long-term investments as a way to provide seed money that can be distributed appropriately to short-term purchases. Carefully timed, this can lead to major gains with managed levels of risk.
Finding the Right Balance
Seasoned professionals like Nicholas Kyriacopoulos like to point out that you don’t have to go all-in on one particular investment market. The best investors know that they need to maintain a balanced portfolio in order to reap the greatest rewards. Keeping that balance allows you to adjust quickly to any movement within the marketplace.
Nicholas Kyriacopoulos views long-term investments as a stabilizer in a good portfolio. Those assets will continue to perform at reasonably profitable levels no matter what happens in the market. In the meanwhile, the savvy investor should also maintain a mix of short-term investments as well to make sure that you have the potential to profit quickly when the market conditions are right.
Nicholas Kyriacopoulos got his beginnings by investing in a few reliable long-term markets. From there, he began to take some calculated risks in short-term markets, turning those stocks into profits that allowed him to grow his fortunes. If you follow this example and take the time to learn about the markets in which you are investing, you can turn a significant profit. Make sure to rely upon long-term investments as your foundation and then pursue short-term investments when it is wise to do so.