Choosing an investing time horizon
Your investing time horizon should correspond with the amount of time you have to reach your investment goal. For example, if you're saving for a vacation you've planned to take in three years, you might as well get some interest with your savings. This would be a great match to a mutual fund, which will provide a remarkably safe harbor for your money and help it grow.
The risks you take with your money depend greatly on how much time remains for your portfolio to recover if something unforeseen happens in the economy or the stock market. If you have a very long investment time horizon, you could even survive a bear market, confident your investments will rebound. This amount of risk helps your investment grow more quickly, although it does create a true chance for loss.