Short-term investments are financial assets that are expected to be converted into cash or sold within a year. They typically include options like stocks, bonds, and money market accounts. These investments are often chosen for their liquidity, allowing investors to access their funds quickly while still earning a return. Investors usually seek short-term investments to meet immediate financial goals or to preserve capital. While they may offer lower returns compared to long-term investments, they carry less risk and can be a safer choice for those looking to avoid market volatility in the short run.