Time Horizon Planning
How long your money can remain invested is one of the most important factors in building a portfolio.
A longer time horizon allows you to ride out short term market swings and take advantage of higher growth investments such as stocks. With more years ahead, there is greater opportunity for market fluctuations to even out and for compounding to work in your favor. While past performance is no guarantee of future results, LPL research using 75 years of data shows a 92% probability of gains in the S&P 500 over a 10-year period.
For shorter term goals, stability becomes more important. If you need your money within a few years, such A as for a home purchase or tuition, more conservative investments like bonds or cash may be a better fit.
Your time horizon directly shapes your asset mix. Longer horizons can support more growth, while shorter horizons typically call for greater stability.
