Your investment approach should not be based on headlines; rather, one of the most important considerations in successful financial planning is time.
The length of time you have until you need the money you have invested, known as your time horizon planning, is a key factor in determining the level of risk you should take with your money. At Ward Goodman, we specialise in helping clients across Dorset and the rest of the UK ensure that their investment approach is aligned with their goals, including the level of risk taken, to ensure their long-term security. Read our main Investment Planning guide to learn more about building a strategy tailored to your future.
What Is a Time Horizon?
Q: What does “time horizon” mean in investment planning?
A: Your time horizon is the period of time before which you want access to your money. This could be for retirement, for a house, for the children’s education, or for creating an income for the future.
The longer your time horizon, the more chance your money has to grow. Short time horizons require a more cautious approach.
When It May Make Sense to Be More Aggressive
An “aggressive” investment approach focuses more on growth-oriented assets such as equities. While these can fluctuate in value, they have historically offered stronger long-term growth potential.
| Situation | Why a Growth Approach May Fit |
| Long time horizon | You have years, or decades, to ride out market ups and downs. |
| Wealth-building stage | Regular contributions allow you to benefit from compounding and market recoveries. |
| No immediate income need | You do not rely on the portfolio for short-term withdrawals. |
| Comfort with volatility | You understand values may fall as well as rise in the short term. |
Time allows markets to recover from downturns, making growth strategies more suitable for long-term goals.
When a More Conservative Approach Is Wiser
A conservative strategy prioritises capital preservation and stability, typically through a higher allocation to lower-risk assets such as bonds, cash, or diversified income investments.
| Situation | Why Stability Matters |
| Short time horizon | A market fall close to when funds are needed can have lasting effects. |
| Approaching retirement | Protecting what you’ve built becomes more important than maximising growth. |
| Drawing an income | Reducing volatility helps support more predictable withdrawals. |
| Non-negotiable goals | Funds needed for specific life events may not allow time to recover from losses. |
In these cases, the focus shifts from growth to protecting accumulated wealth.
The Transition: Gradual, Not Sudden
Investment planning is not about being aggressive in a year and then being conservative in the next year. It is a process that happens over time.
A planned approach may include the following:
- More risk to growth assets in the initial phase
- Reducing risk as you reach closer to your goal
- Reviewing your plan from time to time to ensure that it is in sync with your timeline
Time Horizon vs Risk Tolerance
Q: Is time horizon the only factor?
A: No. While time is of the essence, your comfort level with risk, financial commitments, and other sources of income are important considerations as well.
The same time horizon may require different strategies for two people in the same situation, considering the following factors:
- Job security and salary
- Other pensions and/or assets
- Attitudes towards market volatility
How Professional Planning Helps
Reacting emotionally to market movements can lead to poor decisions. A structured investment plan keeps your strategy aligned with long-term objectives rather than short-term events.
Working with a financial planner can help you:
- Match risk levels to your time horizon
- Adjust your portfolio gradually
- Maintain discipline during market volatility
- Stay focused on your long-term goals
At Ward Goodman, we help ensure your investment strategy evolves as your life does, balancing growth potential with appropriate protection.
Making Time Work for You
Q: What is the key to successful time horizon planning?
A: Understanding that risk should reduce as the need for the money draws closer.
Best practices include:
- Reviewing your portfolio regularly
- Rebalancing as your time horizon shortens
- Diversifying investments
- Planning withdrawals carefully
- Keeping long-term objectives at the centre of decisions
Ready to Align Your Investments With Your Future?
Your investment plan will be based not only on what you are investing for, but when you will need it. Whether you are accumulating wealth, planning for retirement, or transitioning to a time when you will need to live off an income, Ward Goodman can assist you in developing a plan that meets your time horizon and risk tolerance.
Visit our Investment Planning service page to learn more about our investment planning services.
