How to Create a Custom Loop in WordPress Using WP_Query

gistfile1.php

<?php
/*** Custom Loop ***/
function demo_loop() {
  $args = array(
		'cat' => 3,
		'posts_per_page' => 1
	);

	$demo_posts = new WP_Query($args);

	if ( $demo_posts->have_posts() ) { 
		while( $demo_posts->have_posts() ) { 
			$demo_posts->the_post();
			
			$output .= '<li><a href="' . get_permalink() . '">' . get_the_title() . '</a></li>';
		}
	}
	
	return $output;
}

add_shortcode( 'demo_custom_loop', 'demo_loop' );