Step 4 – Define your Time Horizons

The time horizon of investments is important in determining acceptable levels of risk. The time horizon is an expression of the amount of time before half of invested capital might be needed.

Capital values do fluctuate over shorter periods and the investor should recognize that the possibility of capital loss does exist. However, historical asset class return data suggest that the risk of principal loss over a holding period of at least three to five years can be minimized with the long-term investment mix employed under this Investment Policy Statement.

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