Your time horizon is the length of time over which you expect to invest your money. It's a key consideration when choosing investments.
Here are 3 sample time horizons and some investments that might be appropriate for each one.
Time horizonTime horizon The length of time that you plan to hold an investment before you sell it. This may be a brief period of time or span as long as decades, depending on your financial goals.+ read full definition
What to keep in mind
Investments that may work for you
Less than 5 years
Examples: saving for a car, vacation or down paymentDown payment The money you put into buying a large item like a car or home.+ read full definition on a home
You want your money to grow, but if you get poor results, you won’t have time to make back your losses.
Consider lower-risk investments that are easy to turn into cash.
You know you have many years before you’ll need the cash. If you have losses, you have time to make them up. At the same time, this money is important for the future. You likely don’t want to take on too much risk.
Consider some investments with medium to high growth potential and a moderate to higher level of risk.