Investment decisions begin with the purpose of the money and the time horizon. Short-term funds should not take excessive volatility, while long-term capital can use time to absorb market cycles.
Risk and return must be assessed together
Higher expected returns usually involve higher volatility or longer waiting periods. Investors should not focus only on yield while ignoring drawdown and liquidity needs.
Asset allocation drives most outcomes
Stocks, bonds, cash and REITs play different roles. Sensible allocation matters more than frequent market forecasts.
