Everyday money · General financial education

Time horizon

A time horizon is the span until you are likely to need the money. The date comes before the question of how much volatility you can bear.

In more detail

Rough bands help: 0 to 3 years, 3 to 10 years, 10 years and more. A short horizon makes access and lower swings more important, because there is little time to sit out a setback. A long horizon can accommodate swings. It does not erase them. Risk appetite comes after the date, not before.

Background

If you withdraw in a weak spell, the order of annual returns can change remaining capital, even with the same average. Sequence risk is only a warning light here, not a withdrawal rule. A house deposit in 18 months is a short, often immovable horizon: first secure the sum that must be there on the day. Finmon does not recommend a mix.

An example

A house deposit in 18 months: the date is inside three years. Whether prices rise in twenty years does not move that deadline.

A common misconception

What comes first is how brave I feel about markets.

What comes first is when the money must be there. Felt risk appetite comes after.

Source: Investor.gov · Asset allocation. Last reviewed: 2026-10-27. Editorially reviewed on 2026-10-27. Next review 2027-10-27. Version 0.2.0. Finmon explains. It does not advise. Not investment, tax or legal advice.