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What is the importance of making short term and long term financial decisions?
Wiki User
β 15y ago
When making financial decisions it is important to look at your time horizon. Certain investments may be great in the long term but bad for a short term investment. An example of this might be a very volatile investment that has large fluctuations in value. While over the long term this may be a good investment.....short term it may not. If you need funds to pay for a new house or your children's education and the investment has dropped dramatically in value at the time you need the funds this would be a bad situation to be in. It is always good to have enough liquidity to cover any need for funds on a short tem basis while maintaing other investments that you plan to hold over a longer time period.
Wiki User
β 15y ago
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