Call Now For a Free Consultation:
(614) 532-4576
Nationwide Representation

Short Term Vs. Long Term Investments: What Investors Should Know

Short Term vs. Long Term Investments: What Investors Should Know And Understanding Suitability

Securities arbitration claims over “suitability” are some of the most common claims filed each year. Advisors and brokers are required by law to recommend only suitable (or appropriate) investments to their clients. One major factor in determining suitability is the investor’s specific financial goals and the investor’s desired timeline for meeting those goals.

Short-term goals are goals that are less than three years away. These include things like saving for an upcoming vacation or a down payment on a house you intend to buy in the next two years. These short-term goals require a short-term investment strategy.

“Because you plan to spend the money you set aside for short-term goals relatively quickly, you'll want to focus on safety and liquidity rather than growth in your short-term portfolio,” advises FINRA. Otherwise, your investments might fall sharply just when you need the funds.

Insured bank or credit union accounts, Treasury bills backed by the government's promise to repay, money market accounts/funds, and other low-risk investments that pay interest are all good bets for short-term investments.

Most investors, however, are saving for retirement or their children’s college funds. These are usually long-term goals that require a long-term investment strategy.

“For many investors, that can mean allocating most of the principal you set aside for long-term goals to growth investments, such as individual stock [and] stock mutual funds,” says FINRA. “While past performance is no guarantee of future results, historical returns consistently show that a well-diversified stock portfolio can be the most rewarding over the long term … when you have 15 years or more to meet your goals, you have a good chance of being able to ride out market downturns and watch short-term losses eventually be offset by future gains.”

Unfortunately, some financial professionals don’t pay close enough attention to their clients’ financial timelines and end up recommending unsuitable investment products and strategies. This can lead to major losses for the investor.

If you believe your broker or advisor has recommended you purchase an investment that is unsuitable for you based on your financial goals and timelines, please speak with an investment misconduct lawyer for a free evaluation of your case. You can also receive a FREE copy of our book Five Signs of Investment Fraud…And What to Do if It’s Happened to You by giving us a call or filling out the online contact form on this page.

To learn more about building your portfolio based on your financial goals, read FINRA’s “Investing for Different Time Periods.”

About our law firm:

Meyer Wilson represents individuals across the country who have been harmed by investment fraud. All of our cases are handled on a contingency fee basis and we never request a retainer of any kind. Contact us for more information or complete the online form on the top of this page and we will respond promptly.

The information contained in The Firm’s posts on its blog, fraud alerts, investigations or elsewhere on the site is based upon information obtained from other sources including, but not limited to, news outlets and federal, state, and regulatory agency filings. All suspects and subjects of postings herein are presumed innocent until proven guilty in a court of law or administrative action and any and all crimes are alleged until a court or regulatory agency finds otherwise .

Share This Story
If you found the information provided by this article useful, consider sharing to your social media channels to help others in their search for reliable resources.
Consult with Our Legal Team
There is never a cost associated with a consultation
Atlanta Office

945 East Paces Ferry Road, Suite 2275
Atlanta, GA 30326
Columbus Office

305 W. Nationwide Blvd
Columbus, OH 43215
Meyer Wilson
New Orleans Office

900 Camp Street 
Suite 337
New Orleans, LA 70130
Los Angeles Office

2029 Century Park East,
Suite 400N
Los Angeles, CA 90067
Cleveland Office

4781 Richmond Rd.
Suite 400
Warrensville Heights, OH 44128
Bloomfield Hills Office

41000 Woodward Ave.,
Suite 350
Bloomfield Hills, MI 48304
Quick Links
The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter. No recipients of content from this site, clients or otherwise, should act or refrain from acting on the basis of any content included in the site without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient's state. Read More
The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter.
Read More
chevron-down linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram