Effective investment strategies are goal-oriented. And the time you have to meet a particular goal is one of the crucial factors in choosing a strategy.
In the world of investing, time is generally described in one of three ways:
Short-term, which
refers to a period of a few months to two or three
years
Intermediate-term,
sometimes shortened to mid-term, which refers to
a period longer than three years but shorter than
ten years
Long-term, which
refers to a period longer than ten years and perhaps
as long as 40 or 50 years
Gail Dudack,
Managing Director,
Dudack Research Group
Gail Dudack explains why identifying your investment time horizon is important.
There are specific strategies and asset classes that
make sense for each investor’s time horizon, and that should guide
many of your investment decisions. For instance, are you trying to meet
short-, intermediate-, or long-term goals, or all three? You may be able
to meet your short-term goals, over the next two or three years, with
investment strategies that lead to
capital
preservation.
Long-term goals, from ten to fifty years in the
future, may be achieved with strategies such as
buy-and-hold
and
dollar
cost averaging.
Gail Dudack, 