Invest for short- and intermediate-term goals

For goals that are close at hand, how do you balance loss aversion with return potential?

Christine Benz 7 February, 2018 | 6:00PM

The following is part of our Financial Planning To-Do List special report.

Just as putting and chipping look deceptively simple to beginning golfers, so can the process of investing for shorter time horizons trip up investors. It looks so easy, but it can be difficult to get right.

Investors may confuse their risk capacity with risk tolerance, for example, venturing out on the risk spectrum and incurring losses just before they need to tap their portfolios. Or they might assume that just because stocks have delivered returns that have bested other asset classes' in the past five years, they'll do it again during the next five.

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About Author

Christine Benz

Christine Benz  Christine Benz is Morningstar's director of personal finance and author of 30-Minute Money Solutions: A Step-by-Step Guide to Managing Your Finances and the Morningstar Guide to Mutual Funds: 5-Star Strategies for Success. Follow Christine on Twitter: @christine_benz.

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