Your investment time frame can be an important factor in deciding what kind of fund is best for you.
Growth assets, such as shares and property have historically offered higher returns over the long-term but can be volatile over the short-term. That can mean taking on more risk if you are a short-term investor. So, if you are investing for a short-term goal, such as a holiday, you may prefer a fund with a lower risk profile.
On the other hand, if you are investing for a medium or long-term goal, such as retirement, you will have more time to ride out short-term ups and downs, giving you the opportunity to benefit from the long-term growth potential of assets like shares and property. That means you may be more likely to consider a fund with a greater proportion of growth assets. Of course, your investment time frame is not the only thing to consider when making a decision.
The type of investments you make will also depend upon your appetite for risk, especially the risk of short-term loss. Investment Statements will often specify a time frame during which the fund manager believes a particular investment should be held - typically longer for higher risk assets, and shorter for lower risk assets.