What is a long-term investment strategy?

There’s no clearly defined timeframe for what constitutes a long-term investment but they are typically held for longer than ten years, whereas short-term investments are held for five years or less.

The timeframe of an investment strategy is ultimately decided by what you plan to do with the money. Saving for a downpayment on a home requires a different approach to saving than investing money toward retirement. 

Investors generally advocate for a long-term approach where possible so investments can accumulate interest and ride out the ups and downs in the market. This levelling of risk over time is also the reason why short-term investment strategies tend to be more conservative than longer-term ones. 

A diversified investment portfolio has a mix of assets suited to both short and long-term strategies, and these strategies can also change over time as our financial needs change. 

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