Short-term vs long-term investing
The investment strategy that is right for you will depend on your personal circumstances, your stage of life and your tolerance for risk.
Generally speaking, long-term investments are the best option for most individual investors, but it’s best to find a wealth management advisory service that truly tailors an investment strategy to your personal needs.
A long-term investment typically means that you hold the investment for five years or longer, while short-term investments are for investors who will need access to their money in under five years.
At North Advisory, we take the time to understand your situation and life goals to deliver a bespoke investment roadmap to suit how you live your life today and your plans for the future.
“Short-term market movements can be noisy — long-term investing focuses on outcomes, not headlines.”
Short-term investments
At North Advisory, we believe maintaining a long-term view is the key to successful investment and the foundation of wealth accumulation that will secure your future and fund your retirement.
However, some people like to discuss short-term investment options with their financial advisor or accountant to explore their options for generating an income source over a shorter time period.
Short-term investments might include investments such as:
- Bonds
- Cash
- Annuities
At North Advisory, we have the skills and experience to guide you through your choices and make investment recommendations based on your unique set of criteria.
Long-term investments
Long-term investments usually take the shape of assets like shares and real estate, providing significant growth opportunities for your portfolio.
But investors entering into long-term investments must do so with the knowledge the money they invest may not be available or ‘liquid’ for many years.
Two well-telegraphed benefits of long-term investment are:
1. Cushioning from the impacts of inflation
Inflation is a general increase in the price of goods and services that reduces the purchasing power of your money.
Is it really possible to beat inflation?
Some successful long-term investors would say yes!
Inflation impacts all sectors of the economy, but long-term investments may offer some protection against inflation if you are able to hold the asset during difficult inflationary periods to essentially ride out the bad times.
2. Security for retirement
Your time spent in retirement may well account for one third of your life, so it’s never too early to start planning for it.
The best-case scenario for building wealth is to do so over decades, giving long-term investments time to grow and weather the inevitable ups and downs of the market.
At North Advisory, we provide direct ownership of your assets when we build your portfolio, so you are never tied to us or a financial platform – removing unnecessary risk.
Ask us more about long-term investing to build your wealth portfolio today.
“Time in the market is often more powerful than timing the market.”
How to tackle long-term investing
If you’ve decided you’re in it for the long haul and you’re ready to take control of your financial future and build wealth, it’s important to get your finances in order first.
Consider what you earn and what your expenses are.
What do you have left over to work with as an investor?
Next, take stock of your assets and debts and ask your accountant about setting up a debt management plan, if necessary.
Don’t forget to create a buffer too, affectionately known as an ’emergency fund’ – ask your financial advisor to calculate how much you need to put into this fund to protect yourself and your family.
Taking stock of where you’re at and planning where you want to be is a vital first step in your investing planning.
Remember, long-term investments are designed to be just that, long term, and you don’t want to undercut your financial goals by withdrawing funds from them too soon, nor incurring unwelcome tax implications.
At North Advisory, our wealth accumulation specialists specialise in flexible investment strategies that really set you up for success.
Know your time goal and your risk tolerance
We all have different investing goals, but some will be time sensitive, for example:
- providing for children’s education
- building a home
- reducing your work hours in readiness for retirement
- retirement.
At North Advisory, we create your ‘personal dashboard’ to help you regularly review your investments’ performance to help us in helping you prepare for your future.
We believe it is never too early to start investing, but successful investing is dependent on a strategy tailored to your individual circumstances and personal risk tolerance profile.
Our advisors will help you to figure out your risk tolerance in our initial wealth management meetings – a critical step in customising your investment choices to ensure they are aligned with your ultimate financial goals and personal objectives.
The right investment strategy for you
At North Advisory, we develop the right investment strategy for you – a strategy that grows and changes as you do.
Periodic adjustments are made to the strategy as life changes occur, such as job changes, family structure changes and ageing.
The North Advisory wealth management team conducts regular, in-depth reviews of each client’s portfolios – assessing underlying assets, the costs of maintaining investments and the identification of any opportunities to change path, if suitable.
There is no ‘cookie cutter’ approach to our ethos, and we encourage our clients to take an active role in their investment management.
To learn more about the skills and experience we have to guide you through your investment choices, contact us today.
About the author
Marius Fourie - Director & Business Advisor
As Director and Business Advisor, Marius uses his accounting expertise and empathetic skills to work directly with business owners and help them feel at ease with their finances.
Marius saw a common need in clients that just wasn’t being met by accounting providers.
That need was for clear, open communication and streamlined accounting services that didn’t come padded out with any unnecessary features.
Business owners just don’t have time to compare different accounting firms to see which one has the best packages with the best inclusions (many of which they would pay for but never use).
Key Takeaways
Long-Term Investing Builds Wealth More Reliably
Time, compounding and consistency are powerful drivers of long-term returns.
Short-Term Investing Requires Precision and Discipline
Success often depends on timing, market knowledge and the ability to manage risk.
Volatility Impacts Short-Term Results More
Short-term strategies are more exposed to sudden market movements and emotional decision-making.
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Frequently Asked Questions
What is the difference between short-term and long-term investing?
Short-term investing focuses on capitalising on near-term market movements, while long-term investing aims to grow wealth steadily over many years through compounding.
Is short-term investing riskier than long-term investing?
Generally, yes. Short-term investing can involve higher volatility and greater reliance on market timing, whereas long-term investing spreads risk over time.
Can short-term investing deliver higher returns?
It can in some cases, but it also carries higher risk. Consistently achieving strong short-term returns is difficult, even for experienced investors.
Why is long-term investing often recommended?
Long-term investing benefits from compounding, reduces the impact of market volatility and aligns more closely with common goals like retirement or wealth accumulation.
Can investors combine short- and long-term strategies?
Yes. Some investors allocate a small portion of their portfolio to short-term opportunities while keeping the majority invested for long-term growth.
What’s the difference between short-term and long-term investing?
Short-term investing is usually focused on quick gains and short timeframes, but it can be higher risk and more reactive to market moves. Long-term investing is focused on steady growth over time, allowing your investments to compound — and it’s often a more reliable approach for building wealth and retirement security.
North Advisory’s Reviews 
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Flo Mitchell
4 weeks ago
Changed to this company in 2019 from former accountant and love their approach of organizing everything for me face to face with Xero set up plus being able to call as much as I need for set annual fee. They also picked up on something that was not done correctly by my former accountant and saved me $4k for this.
Timothy Cummins
A month ago
They the truly the best, Martin and Judy are so experienced, knowledgeable & professonal, also quite like speaking with Rose : ) all people are so lovely!
Michael Iera
2 months ago
Positive, Responsiveness, Quality, Professionalism, Value
Michael Iera
2 months ago
Excellent company in regards to service and professionalism. Very experienced in dealing with complex matters. Highly recommended.
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Suite 6, 11 Oaks Avenue
Dee Why, Northern Beaches
NSW 2099
Australia