Any investment in stocks depends on the investor’s goals – whether he wants to make a short, or medium, or long term investment. Your investment goal is key to determining the stocks that you should buy.
It is a crucial calculation that is key to making profit; otherwise, your investment strategy is faulty and prone to failure. For example, if your investment goal is for a short term duration but you invest in a stock which can generate profit only after two or five years, then you have made a gross miscalculation.
It is for this significant reason that your investment strategy and goals should be in tandem with the stocks that you buy.
What is a Short Term Stock
A short term stock is a financial instrument which an investor intends to hold for a short duration, usually for a period of less than a year but also as short a duration as one day. The short term stocks are vulnerable to high risk due to day-to-day market volatility, which also however goes in their favour of producing higher returns.
The short term stocks require a focussed approach as investors are needed a thorough vigil of the market so they can seize the moment by frequently buying and selling these stocks.
Best Short Term Stocks in India
The short term good stocks to buy in India include the following. Here you can also check their current value, one month old value, and six-month old value which will help you picture their growth in the past six months.
Here is a brief introduction about the best short term stocks in India where your investment is expected to grow.
Larsen and Toubro Ltd
Larsen and Toubro is headquartered in Mumbai and is one of the largest companies in India. It was founded in 1938. The company’s business divisions include real estate, technology, engineering, construction, and manufacturing. The company directly and indirectly employs more than 250,000 individuals, among them 45,000 permanent employees. Larsen and Toubro operates in over 50 countries
Bharti Airtel Ltd
Bharti Airtel, or simply Airtel, was founded in 1995 and is headquartered in New Delhi. The company has over 500 million subscribers/customers across 17 countries of the world. Airtel is ranked among the top three mobile network operators in the world, with a coverage network that covers two billion people. It is India’s largest integrated communications solutions provider and the second largest mobile operator in Africa. The company’s retail portfolio includes high speed 4G/5G mobile broadband, Airtel Xstream Fiber, streaming services spanning music and video, digital payments and financial services.
PFC Limited
Power Finance Corporation, or the PFC, Limited is a non-banking financial corporation that is dedicated to financing the power sector. It was established by the Government of India in 1986 with an aim of financing the development and growth of the power sector. It is now the single largest lender to the Indian power sector and supports about 23% of the country’s installed power generation capacity. The corporation also serves as the nodal agency for development of restructured accelerated power development and reforms program, and the ultra mega power projects.
REC Limited
Founded in 1969 and headquartered in New Delhi, REC Limited is the subsidiary of Power Finance Corporation Limited. It is under the ownership of the Ministry of Power, the Government of India, and provides loans to central and state sector power utilities. In March 2023, REC Limited posted a revenue of ₹39,520 crore and a net income of ₹11,166 crore.
Advantages of Short Term Stocks
The advantages of short term stocks are plenty. Here is what you need to keep in mind:
Ease of liquidity
Secure source of income
Possibility of high returns
Healthy Investment Tips
If you intend to make profit but want to invest for a brief duration of a few weeks or few months, you need to invest in short term stocks. It is important that you understand the concept of short term investments, the associated risks, and the potential for profit. You must have clarity on your investment goals before you invest in short term stocks.
Also, it is important for any investment that you make informed choices, rather than emotional and biased choices. In case of short term stocks, you must zero-in on the best stocks for short term gains and carefully monitor their trajectory of past six months or one year.
If you intend to invest your money in stocks for a short duration, ranging from a few weeks to a few months, you should invest in short term shares. But always remember that potential for profit and also the risks are higher in case of short term stock investments.
2. Is it risk-free to make a short-term investment in shares?
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No. The risks associated with investment in short term stocks are higher compared to medium and long term investments. It is for the reason that daily price fluctuations can significantly alter the possibility of profit or loss.
3. How much should I invest in short tеrm stocks?
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It is entirely up to you to decide how much you want to invest in short term stocks. However, it is always wise not to place all your money in one basket. So, it is recommended to diversify your portfolio by investing in various financial instruments, as well as different investment durations, like short, medium and long term stocks.
4. Is short term or long term stocks better for investment?
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Whether short term stocks or long term stocks, both of these categories have their own sets of advantages, disadvantages and risks. However, you must choose the stocks according to your investment goals and risk appetite.