Difference between Short and long term investment

Difference between Short and long term investment

There are different approaches of classification of investments. Here we have explained the most common approaches.

1st Approach

Generally the investment cover a period of less than twelve month is known as short term investment and an investment of more than 12 months is termed as long term investment.

2nd Approach

Some business further classify the investment into three categories short term, medium term and long term investment covering a period of two to five year , five to ten year and more than ten year respectively. It is important to remember that any investment less than twelve month is deemed to cash or bank equivalent.

1st Approach
Investment Classification	Period
Short-term Investment	Less than 12 months
Long term Investment	More than 12 months
2nd Approach
Investment Classification	Period
Short term Investment	1 to 5 years
Medium Term Investment	5 to 10 Years
Long Term investment	More than 10 Years