Short Medium and Long Term Financial Needs

Published / Last Updated on 19/04/2023

By breaking down your short-term, medium-term and long-term financial needs, you can get a better understanding of money that you will need during those periods or indeed how much you need to save to plan for your long term needs as well as understanding the levels of investment risk you can afford to take within each area.

SHORT – MEDIUM – LONG TERM INVESTING

If we segregate all your monthly, wealth and investments into:

Short Term

Money that you need access to in the next 0-5 Years

Medium Term

Money that you need access to in the next

5-10 Years

Long Term

Money that you need access to in the next

10 Years +

       

How would you like it to be split?

Short Term

Medium Term

Long Term

e.g., 30% Short, 30% Medium, 40% Long term

%

%

%

OR amounts e.g., £50,000 Short, £100,00 Medium, £100,000 Long term

£

£

£

 

TOLERANCE TO RISK/LOSSES & MARKET VOLATILITY

You have given your general attitude towards risk. We now wish to test your tolerance to losses of that stated risk level.

If in 12 months’ time, investments markets have fallen. How much of a fall in value are you prepared to accept?

Short Term Money 0-5yrs:

0% Deviation

 

Up to +/- 5% Deviation

 

Up to +/- 10% Deviation

 

Up to +/- 15% Deviation

 

Up to +/- 20% Deviation

 

Up to +/- 25% Deviation

 

Up to +/- 30% Deviation

 

Up to +/- 40% Deviation

 

Up to +/- 50% Deviation

 

Medium Term Money 5-10yrs:

0% Deviation

 

Up to +/- 5% Deviation

 

Up to +/- 10% Deviation

 

Up to +/- 15% Deviation

 

Up to +/- 20% Deviation

 

Up to +/- 25% Deviation

 

Up to +/- 30% Deviation

 

Up to +/- 40% Deviation

 

Up to +/- 50% Deviation

 

Long Term Money 10yrs +

0% Deviation

 

Up to +/- 5% Deviation

 

Up to +/- 10% Deviation

 

Up to +/- 15% Deviation

 

Up to +/- 20% Deviation

 

Up to +/- 25% Deviation

 

Up to +/- 30% Deviation

 

Up to +/- 40% Deviation

 

Up to +/- 50% Deviation

 

OVERALL TOLERANCE TO LOSSES FOR ALL OF MONEY?

0% Deviation

 

Up to +/- 5% Deviation

 

Up to +/- 10% Deviation

 

Up to +/- 15% Deviation

 

Up to +/- 20% Deviation

 

Up to +/- 25% Deviation

 

Up to +/- 30% Deviation

 

Up to +/- 40% Deviation

 

Up to +/- 50% Deviation

For each, short, medium and long term you can then plan what risk profile you want for each taking no risk or low risk for short term needs and medium risk to high risk for longer terms funds that you may not need for 10 or 20 years plus.

By having an understanding of your general risk profile, your attitude to risk and importantly, your tolerance to losses, we can then better understand how to build your pension and investment portfolio to meet your short-term, medium-term and long-term objectives and needs.

See Risk Profiles and Tolerance to Losses:  Risk and Losses

By completing the above, both you and us will then be in a position to work out what investment risk to take with all parts of your finances and different stages in your life.

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