Short-term, goal-oriented planning is considered key to wealth creation and fulfilling short-term goals. From saving up for a car or dream bike, education, to an exotic holiday, everything requires savings. In the financial world, asset allocation is crucial. For most, the investment mantra remains long-term investment with low risk and short-term investment with high liquidity.
The division of equity and debt in one’s portfolio has been an age-old conundrum for investors. While risk appetite has conventionally been the guiding principle while making the exact allocation of the investment, a high-cost inflation index (presently 331) and the resulting perks of indexation may have convinced some investors to prefer debt mutual funds as a better home for their money.
The working capital cycle, also known as the cash conversion cycle, refers to the amount of time it takes for a company to convert its current assets into cash and then use that cash to pay off its current liabilities. It measures a company’s ability to efficiently manage its cash flows.
Saving up for a Car, that dream Bike, a piece of jewellery or just an exotic holiday – short term goal-oriented planning is a must. In the financial world, asset allocation is crucial. Long term with risk and short term with liquidity is often the mantra. Any investment which is for a period of less than 1 year is a short term investment, such investments are good if you have a goal to fulfill in the near future or are just plain risk-averse and want liquidity as an option. If you are the one who is just beginning your investment journey may be going at it slowly and steadily will help you gain that confidence.