Pursuing short-term financial goals -- those that you'd like to achieve within one to five years, such as a down payment on a home or car -- can require a different strategy than pursuing long-term goals. Here are some steps to help you save and invest when you're going to need your money sooner rather than later. Understanding Short-Term Investments 1Short-term bond funds primarily invest in U.S. government or corporate debt with maturities that range from one to three years. 2Money market funds pool investors' dollars to buy money market instruments. These types of securities aim to produce current income, offer liquidity (how quickly you can sell an asset), and usually aren't subject to the dramatic ups and downs of stocks. 3Certificates of deposit are interest-bearing debt instruments with a wide range of maturities. In exchange for purchasing a certificate of deposit, the investor will receive the return of principal plus interest at the maturity date. Source/Disclaimer: Investors should carefully consider the fund's investment objectives, risks, charges and expenses before investing. To obtain a prospectus, or if available, a summary prospectus containing this and other information, contact appropriate fund company or view the fund prospectus on Website of the appropriate fund company. Please carefully read the prospectus or the summary prospectus before investing. 1,2Your investment is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. 1,2Current performance maybe higher or lower than the past, which cannot guarantee future results. 1,2Share price, principal value, yield and return will vary and you may have a gain or loss when you sell you shares. 2An investment in money market funds is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in these funds. 1Bonds are subject to interest and market rate risk if sold prior to maturity. Bond values will decline as interest rates rise and are subject to availability and change in price 3Certificates of deposit offer a guaranteed rate of return, guaranteed principal and interest and are generally insured by the FDIC (seehttp://www.fdic.gov/consumers/consumer/information/fdiciorn.htmlfor additional information). Early withdrawal of certificates of deposit may be subject to penalty. © 2012 S&P Capital IQ Financial Communications. All rights reserved.
Finally, remember that short-term financial objectives should not take away from investing for long-term goals.
Saving for Short Term Goals
February 28, 2013