The time horizon is the estimated period you can leave your money invested without needing it. It is one of the most important factors when deciding what to invest in.
- Short term (less than 2 years): Money you will need soon. It would not be advisable to risk it in volatile assets. Ideal options include savings accounts or term deposits.
- Medium term (2–5 years): Some risk could be taken, but with moderation.
- Long term (more than 5–10 years): You have room to ride out downturns and wait for recoveries. More risk could be taken with the expectation of higher returns.
💡 Example
If you are saving to buy a car in 6 months, your horizon is short term — that money would not be well placed in crypto. If you are thinking about retirement in 25 years, your horizon is very long — you would have time to recover from any market crisis.