Sample article — prepared for client review.
An investment time horizon is the period before money is expected to be needed for a financial goal. A near-term expense and a goal many years away can call for different discussions about risk and access to funds.
Start with the purpose
Identifying what the money is intended for helps give the investment decision context. The timing of that goal is one factor in choosing an appropriate mix of assets.
Consider risk alongside time
A longer horizon may allow more time to experience market fluctuations, but it does not remove the possibility of loss. Risk tolerance and the ability to withstand a loss remain relevant, whatever the timescale.
Revisit the plan
Goals and circumstances can change. A review can consider whether the portfolio’s balance remains aligned with the current time horizon and risk tolerance. There is no single asset allocation that suits every investor.
This sample is general educational information, rather than a recommendation for an individual’s circumstances.
Further reading: Investor.gov: Asset Allocation and Diversification.