Short Term

AAA

DEFINITION of 'Short Term'

1. In general, holding an asset for short period of time.

2. In accounting, an asset expected to be converted into cash in the next year, or a liability coming due in the next year. Also known as current assets and liabilities.

3. For investing, a security that matures in one year or less.

4. For taxes, a holding period of less that one year.

INVESTOPEDIA EXPLAINS 'Short Term'

As you can see from above, the exact definition depends on the context. However, in general, you can think of short term as within the next year.

The determination can be very important for taxes. Assets held short-term are generally taxed at a higher rate than assets held for more than a year.

RELATED TERMS
  1. Current Assets

    1. A balance sheet account that represents the value of all assets ...
  2. Current Liabilities

    A company's debts or obligations that are due within one year. ...
  3. Long Term

    Holding an asset for an extended period of time. Depending on ...
  4. Medium Term

    An asset holding period or investment horizon that is intermediate ...
  5. Near Term - NT

    A period of time referring to a short time into the future. Near ...
  6. Short-Term Investment Fund - STIF

    A type of fund that invests in short-term investments of high ...
Related Articles
  1. Investing Basics

    Do Your Investments Have Short-Term Health?

    If a company is strong enough to survive tough times, it is more likely to provide long-term value.
  2. Investing Basics

    Long-Term Investing: Hot Or Not?

    Forget the latest craze - you're more likely to succeed with a buy-and-hold strategy.
  3. Active Trading Fundamentals

    3 Things Investors Can Learn From Traders

    By incorporating some of the best practices of top traders, investors can greatly improve portfolio returns.
  4. Taxes

    Capital Gains Tax 101

    Find out how taxes are applied to your investment returns and how you can reduce your tax burden.
  5. Trading Strategies

    10 Tips For The Successful Long-Term Investor

    These guiding principles will help you avoid common folly during the decision-making process.
  6. Options & Futures

    I have a short period of time (1 year or less) during which I will have money to invest. What are my ...

    If you only have a short period of time in which to invest your money (i.e. less than one year), there are several investment options you should consider outside of the typical checking and savings ...
  7. Investing

    Do long-term bonds have a greater interest rate risk than short-term bonds?

    The answer to this question lies in the fixed income nature of bonds and debentures, often referred to together simply as "bonds". When an investor purchases a given corporate bond, he or she ...
  8. Delivery duty paid (DDP) is a shipping term.
    Investing

    What does DDP Mean?

    Delivery duty paid (DDP) is a shipping term specifying that the seller is responsible for all costs associated with delivery of the goods to the buyer. It is usually used when goods are exported ...
  9. Fundamental Analysis

    What is a good interest coverage ratio?

    Learn the importance of the interest coverage ratio, one of the primary debt ratios analysts use to evaluate a company's financial health.
  10. Fundamental Analysis

    What is a bad interest coverage ratio?

    Understand how interest coverage ratio is calculated and what it signifies, and learn what market analysts consider to be an unacceptably low coverage ratio.

You May Also Like

Hot Definitions
  1. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  2. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  3. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  4. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  5. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  6. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
Trading Center