Types of Investment Goals: Short, Medium and Long-Term

Investing is typically viewed through a time frame when it comes to setting goals. Investing requires time in order to see growth. There are typically three types of investment goals: short term, medium term, and long-term goals.

Type of investment goal


Short Term 5 Years
Medium Term 5 – 10 Years
Long Term 10+ Years

Investing is full of volatility, so they tend to have much longer time frames than your average goals. To maximise the possibilities of success when investing, longevity is the key. Holding your investments long term gives you the greatest amount of time to see growth.

However, goals are specific to each individual, and every person will have different aims depending on their age, financial situation, and lifestyle amongst other things which is why there are different types of investment goals. When setting your own investment goals, you may have short term ambitions, or you may be thinking longer term. It makes sense to choose which one of the types of investment goals matches your own ambitions.

For example, you could have plans for all of short, medium- and long-term horizons. Alternatively, you may have one big goal, which you could choose to split up into smaller, appropriate goals to help you on your way to achieving your long-term ambitions. You could simply have the sole aim of achieving one specific goal within a given time-frame.

Whichever type of investment goal you decide, each kind has its own considerations given the varying time frames. It is important to understand the different types of investment goals in order to consider how it may be suitable for you. There will be certain types of investments as well as factors which affect your decision making for each time horizon. It is appropriate that you take the time to contemplate your own circumstances when defining your own goals, and where they fit into short, medium- and long-term time frames.

Short Term Investment Goals

Short term goals are up to 5 years when it comes to investing. 5 years may be considered the minimum time to be investing in order to see consistent results. However, everyone is different, and goals can be short term. in fact, there are plenty of goals you could set, and achieve, within this time period.

In the short term you may be investing to:

  • Afford your lifestyle
  • Grow your wealth
  • Beat inflation
  • Try and get on the property ladder
  • Solidify your financial position

Investing short term is likely to lead to goals which aim to help you create a solid financial foundation. These goals will typically be built around preserving your wealth and building up your investments. Additionally, short term goals are likely to influence your lifestyle choices, so it is important the goal fits in with your current situation. These types of goals may also be used to celebrate small wins on your way to achieving your bigger goal.

As they are short term, there isn’t too much time to see investments grow consistently enough. You won’t want to lose money especially if is required at the end of the short-term period. Therefore, these goals typically require a greater certainty about the investments you choose. Short term goals typically lead to less risk, as you look to solidify what you have, and create a basis for your investments.

Medium Term Investment Goals

A medium-term investing goal will typically fall between 5 and 10 years. They are set with the idea of looking longer term to impact your current situation, but within what seemingly is a reachable distance. Medium term goals are set with the idea of seeing growth within investments, albeit not to an assets full potential.

In the medium term you may be investing to:

  • Increase your wealth and net worth
  • Develop your portfolio
  • Solidify your financial situation
  • Personal events:
    • Mortgage
    • Children/family
    • Car
    • Take a different life path – career/education/sabbatical/vacation

Mid-term goals typically have the idea of balancing growth and security.

5 to 10 years allows the possibility of growth. Investments are given the chance to begin to flourish, and you can begin to see real progress within them if they do increase (Not all investments grow. Don’t forget!). It allows you to create a portfolio which really creates the potential to see your net worth increase. Medium term goals also give you a chance to really solidify your financial position. As you grow your investments, and your investments grow, you simply have a solid base for your monetary situation.

When you invest with medium term goals, you are able to take more risk in the investments you choose. The time period allows a greater length of time to iron out any fluctuations and allow your portfolio to grow. Mid term goals give you a greater choice when selecting assets, as there is time on your side. They allow you to aim for that greater level of financial freedom as you aim for increased solidity amongst growth.

Long term Investment Goals

The ideal time to invest is for as long as possible, and so long-term goals allow the greatest possibility for success when investing. Long term when investing means 10+ years, where the longer you invest, the greater chance of success. These types of goals create a greater motivation to achieve what you want from investing, as they give investments the most time to reach their fullest potential.

In the long term, you may be investing to:

  • Retire
  • Grow your long-term Wealth
  • Live off investments
  • Create an income

Long term goals allow you to aim high when investing. They create the possibility of seeing the largest returns, and in turn, helping you achieve your greatest ambitions. Long term goals are used to generate a strategy which is persistent, and growth orientated. They allow you to benefit from compounding, a longer timescale to see out fluctuations, and maximum possible growth.

When investing with long term goals, you are able to choose investments which have the highest levels of risk. Firstly, you have the opportunity to earn that money back if you do happen to lose it, so it allows you to choose much more volatile investments. Secondly, there is the possibility to take risks, as fluctuations have time to flatten out, allowing investments the time to prosper to their truest potential. These types of goals create the opportunity of the highest levels of success when it comes to investing.

Leave a Comment

Your email address will not be published. Required fields are marked *