Short-term goals can include saving for an emergency fund, vacations or a wedding, and funds for such goals need to be kept liquid with minimal volatility. Examples of such investments include cash equivalents like short-term fixed deposits, high yield-saving accounts, money market funds and short-term government bonds. They are stable instruments and can be easily used at minimal cost.
Investors need to consider their investment horizon and risk tolerance level in order to determine the right mix of assets in their investment portfolio, says Abel Lim, UOB head of wealth management advisory and strategy.
One’s investment horizon can be determined by an investors’ financial goals, which usually belong to one of these three categories, short-term goals, medium-term goals and long-term goals.
