Back to: Understanding investing

Before deciding on a solution, step back and take a look at the big picture –where you are, where you want to get to and when you want to get there.

Be clear about your goals
It might be something very specific, such as buying a home, a car, or a holiday. It might be more general, such as building your retirement nest egg. Whatever it is, if you're clear about your destination, you'll have a greater chance of getting there.

Understand your timeframe
When it comes to choosing investments, it is important to know when you're going to need to sell them.

1-2 years is generally considered short–term and better suited to stable, conservative investments.

3–5 years is medium-term and 5 years or more is long–term.

Long–term investors can generally afford to choose more volatile investments such as shares, because they have more time to ride out the ups and downs.