Risk, upside and time horizon
How much risk is reasonable for me?
3 minute read
Risk is not volatility on a chart. It is the chance you have to sell at the wrong moment, or that the thing does not come back at all.
Time horizon is what converts risk into something manageable. Money you need in 18 months and money you will not touch for 20 years should not be in the same place, whatever the returns look like.
Upside deserves the same scrutiny as risk. Ask what has to go right, how likely that is, and who is telling you it will.
Why this matters
Most bad outcomes come from a horizon mismatch, not from picking the wrong asset.
What to do with this
- Label every pot of money with when you will need it, before you decide where it goes.
- Keep the cushion boring and reachable — that is what lets the long-term money stay long-term.
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