A simple framework for matching short, medium and long-term goals to scheme categories.
Start With The Date, Not The Product
The single most useful question in any investment conversation is: when do you need this money? Everything else — category, risk tolerance, even the amount — follows from the answer. A product that is sensible for a ten-year goal can be entirely wrong for an eighteen-month one, and the difference has nothing to do with the quality of the scheme.
A Rough Mapping
As a general industry convention, money needed within a year is kept in categories designed for capital preservation rather than growth. Money with a one-to-three-year horizon sits in shorter-duration fixed-income categories. Money that will not be touched for five years or more is where equity-oriented categories are typically considered, because that horizon gives volatility time to average out.
The Mistake Worth Avoiding
The common error is placing a short-horizon goal in a long-horizon category because the recent returns looked attractive. A house down payment due in eighteen months does not become a ten-year goal because equity performed well last year. If the money must be there on a date, the category has to respect that date.
Write It Down
Goals that exist only in conversation tend to drift. Recording the goal, the date, the target amount and the monthly contribution turns a vague intention into something you can actually review against. We record this at onboarding for exactly that reason.
