Short-term investments are financial assets that are expected to be converted into cash within a year. They typically include options like savings accounts, certificates of deposit (CDs), and money market funds. These investments are generally considered low-risk and provide liquidity, allowing investors to access their funds quickly. Investors often choose short-term investments to preserve capital while earning a modest return. They are suitable for individuals who may need their money soon or want to avoid the volatility associated with long-term investments like stocks or bonds.