Investment Horizon

When do you need the cash?

That is, you're investing your hard earned after-usurously-taxed-dollars. When do you need them to be returned as dollars?

If you're 26 and investing retirement money, you need them back in 50 years or so. Maybe longer. So you want smaller, faster growing, albeit more volatile companies as your investment purview.

If you're 32, recently married, and need to save another 12 grand to make your down payment on the dump of your dreams, you can't take stock market risk, so maybe your horizon is 6 months, and you can only afford 6 month FDIC-backed CDs paying 2% interest.

And then there's the vast in-between. Venture capital and private equity funds usually run a dozen years or so. Hedge funds stamp a gain or loss every quarter. But many carry "you can't redeem your dough without a year's notice" clauses. They're all over the map, but time horizon matters a ton in making good investment choices.

Bottom line: the longer you have, the more risk you can generally take. Time here is your friend...and yes, it's ironic that, when you need the money least or least-soon, you do the best with it. Go figure.