The best short-term investments for 2023: options to profit

With so much uncertainty in today's world, people look for short-term investments to make a profit. While financial markets are going through a volatile phase, short-term inflows can offer sharp gains. Here are some of the best options to invest in 2023 that are sometimes overlooked by short-term investors.

Bond funds can offer ideal security for some investors looking for short-term investments. Although bond funds have low returns, they are generally stable and guarantee a short-term return. Bond funds also offer investor security as they are backed by a local government. This means that even if bond prices fall, investors will not lose their entire investment.

Highly liquid investments are also great options for short-term investors. Blue-chip stocks and highly liquid mutual funds are great options. Furthermore, ETFs (Exchange-Traded Funds) are a good option, as they are usually diversified. These usually consist of a portfolio of securities, traded daily.

The 7 best short-term investments

1. Direct Treasury: Tesouro Direto is considered one of the best short-term investments and is offered by the Federal Government. The investor can opt for a pre-fixed treasury bond, where the yield will be defined at the time of purchase; or post-fixed bonds, whose value varies according to the inflation index or CDI. Treasury bonds can be sold at any time to ensure investment liquidity.

2. Fixed Income: The investor can opt for several fixed income options such as Bank Deposit Certificate (CDB), Interbank Deposit Certificate (CDI), Real Estate Credit Letter (LCI) and Agribusiness Credit Letter (LCA). These modalities offer a percentage of the amount invested to your money within certain periods.

3. Gold: Gold is considered one of the safe investments for those looking to earn income. Gold prices fluctuate depending on market supply and demand, and despite the fluctuations, gold has been classified as a profitable investment.

4. IPCA Treasury: The IPCA Treasury is a security linked to inflation in Brazil. It is a safe investment and the income is paid on maturity.

5. Forex: Forex is one of the most interesting investments for profit seekers and, when applied correctly, it can be extremely profitable.

6. Foreign currencies: Foreign currencies are also good choices. Investors can diversify their investments, considering exchange rate movements and currency volatility.

7. Actions: Shares are among the best short-term investments and are an option for those looking for quick results. However, it is necessary to know the market and be aware of new developments to control profitability.

How to get results from short-term investments

1. Choose a suitable action – To obtain viable results in short-term investments, you first need to research and select suitable stocks. It is important to consider specific characteristics of the stock, such as its growth history, dividend payment history, and price volatility.

2. Set goals and limits – Setting clear goals and limits will help ensure you don’t take more risks than you’re comfortable with. Take some time to evaluate your budget and set a maximum amount you are willing to risk, as well as the amount of profit you want to make.

3. Follow the news – Pay attention to any news and data that could influence the price of the share in which you invest. Make an effort to stay informed about possible changes in the company's fundamentals that could affect the share price.

4. Be Disciplined – Be careful not to get emotionally involved in a specific trade. Set clear limits on the appropriate amount of risk you are willing to take on your positions, as well as the circumstances under which you would like to exit the investment.

5. Take advantage of leverage effects – leveraged trades are a great way to gain greater profit potential from relatively small investments in limited quantities. However, when it comes to leverage, you need to be careful not to risk bigger losses.

6. Avoid stress – If you are new to stock trading or have little vocal experience using advanced tools such as derivatives and leverage, it is important to avoid taking unnecessary risks. Take some time to educate yourself and better understand the financial markets, as well as the tools and tactics you will use.

Conclusion

Making short-term investments can help increase an investor's wealth for three main reasons: generating income, converting assets into cash, and achieving short-term results.

First, with investments in stocks, bonds, or short-term financial products, an investor can earn significant income from short-term interest rates or returns on their investment. For example, an investor may purchase Treasury bonds that offer reasonable short-term interest to meet their earnings goals.

Additionally, short-term investments can help investors convert assets like stocks, mutual funds, and certificates of deposit into almost immediate liquidity. This is useful if the investor needs money to cover unexpected expenses or wants to raise funds to finance a large project.

Finally, short-term investing allows investors to achieve short-term results quickly, allowing them to take advantage of opportunities that require a quick reaction to make a quick profit. These investments can also help investors avoid significant losses in volatile markets because they can liquidate their position before it loses value.