When investing, you cannot discard the importance of the investment horizon. It is the time you, as an investor, feel comfortable holding the investment for. Understandably, determining the right investment horizon requires understanding financial goals and correctly assessing the risk appetite. Investment horizons can be broadly classified into Long-term (Suits investors seeking capital appreciation for retirement planning and other ambitious financial goals.) Medium-term (Suits investors seeking to buy a car or a house over the medium term.) Short-term (Suits investors seeking a short sum of money over a period of say six months to a year.)