Related Pages
What's Your Time Frame?
Knowing when you plan to cash out an investment is an important part of choosing the right investment. A clearly defined time frame should be a part of every investment decision.
When we talk about an investment's time frame, we mean the time between when you make the initial investment and when you'll need the money.
If you start an investment with the goal of paying college tuition for a two-year-old child, you'll need the money starting in about 16 years. If that child is 15, you'll need the money starting in about three years.
Every investment has its own time frame depending on the goal, and the time frame can change as the goal approaches.
Why define your time frame?
Successful investors make a point of defining the time frame for a goal before taking action. Why? Because a clearly defined time frame helps when deciding which investment options are right for the goal.
If the time frame is short, financial advisors generally recommend more stable, less volatile investments. With a longer time frame, some short-term volatility may be acceptable.
Without a clearly defined time frame, choosing the appropriate investment is a guessing game. And investing should be about making decisions that are right for your situation—not guessing.
Consider two investment time frames
It's important to remember that in most cases the time frame of your investments will change. A goal that's 15 years away will eventually be 10 years away, then five years away, and so on.
It's important to reevaluate the time frame periodically because an investment decision that makes perfect sense with a 15-year time frame may not make much sense when your time frame reaches five years or less.
A financial advisor can help define the time frame for your goals, as well as suggest investments that are appropriate for them.
Time frames change
It's important to remember that in most cases the time frame of your investments will change. A goal that's 15 years away will eventually be 10 years away, then five years away, and so on.
It's important to reevaluate the time frame periodically because an investment decision that makes perfect sense with a 15-year time frame may not make much sense when your time frame reaches five years or less.
A financial advisor can help define the time frame for your goals, as well as suggest investments that are appropriate for them.
You need Adobe Acrobat Reader 6.0 or higher to view and print PDF documents. Download free version from Adobe's website.
For U.S. residents only.