Summary of Asset Allocation and the Investment Time Horizon

As far as getting the maximum gain from your investments is concerned, time is on your side. Your investment time horizon has a major impact on your asset allocation strategy. The longer you have to hold an investment before you cash it in, the more your risk is decreased when investing in volatile assets like common stocks. The shorter your time horizon, the more your risk is increased when investing in volatile assets, and the greater is your need to invest in more stable assets such as government bonds and certificates of deposit. As your investment time horizon changes, you may want to adjust your asset allocation strategy to either increase growth or decrease risk.

To get started on creating a portfolio, see the tools below.