I have long been enamored with a little-known Scottish company who maintains a sign over their entrance door that reads “ACTUAL INVESTORS THINK IN DECADES NOT QUARTERS” and when I see these talking heads rambling about investing for 2025, I laugh at their references to a year as long-term.

The Scottish company’s sentiment has meaning – perhaps countries who look at their history in thousands of years versus our recent American adventures have more appropriate perspectives when it comes to investing in the marketplace. Too often investors focus on the “here and now” forgetting that if your dollars are invested in the markets, you are in it for the long-haul (or at least you should be).

There’s a reason I ask about your parents and your grandparents (to get an idea of how long we need your dollars to last) and there’s a method to my madness when we talk about buckets within your portfolios (to gauge the size of your cash bucket as insulation from market movement). You aren’t going to take all of your IRA out the month you retire and buy a fancy car (or do whatever) – those dollars are for your future, which could feasibly be 30 years from now if you retire today.

Here’s a rough guideline on time definitions in the world of investing:

• Anything less than 3 years is the equivalent of tomorrow in the average perception of time. These dollars are destined for cash. The job for those dollars is to sit still and be there when you need them. We’re OK if they don’t earn squat – that’s not what they are there for. They are there to make sure you have what you need in the coming months to keep a safe roof over your head and nutritious food on the table, or remodel the bathroom, or take that anniversary trip.
• The three to five-year range is really just the next quarter or two in “people-time” so think about going conservative with those dollars. They might fluctuate in value but the odds are that they’ll be a little bit larger when the time comes to spend them. If a traditional market cycle is 7 to 9 years, you certainly don’t want to be on the downswing of that cycle, heavily invested in the markets, just when you need the money. Go conservative and set your expectations appropriately. If there’s more there when you cash out, celebrate your good fortune.
• From there we gradually move towards long-term but even then we have to ask: Are these “long-term and I don’t need income” dollars or “long-term and I need income dollars” which can look very differently when we build portfolios. As we’ve talked about so often before, if you aren’t going to pay attention to the statements during crazy markets, investing more aggressively isn’t as insomnia inducing as monitoring the portfolio more frequently might be.

While I would never recommend ignoring your investments (as seen from my other blog posts), I also don’t recommend looking at them too often. If we are in this for decades, why would we look at our statements weekly (yes, you know who you are…). Think of it this way: If you start investing when you are in your thirties (I give everyone their 20s to live on the wild side if they so choose – it shapes who you are later in life), that’s a SIXTY YEAR (60) portfolio. For my younger clients, if you’re looking to leave money to those rug rats you have now – call it an 80-year portfolio. That should be the lens we use when we talk about long term investing.