Page 92 - Intelligent Investing (3)

Time Horizon & Risk Management

● The amount of time an investor has before they plan to access the money in

their portfolio

● A basic rule of thumb is investments with shorter time horizons should carry

less risk and investments with longer time horizons should carry more risk

● As they get older and closer to retirement, they will shift their portfolio to more

conservative investments such as bonds - however that is what the “average

person” does and your goals, financial literacy and risk tolerance should be

taken into account before moving your portfolio around

● Index Funds generally offer the best preservation of capital along with
appreciation and dividends over bonds due to the rise of share price of the

companies the index fund invests into