Time Horizon

Sounds like an emo rock band, but time horizon actually refers to the amount of time you have before you want to spend your money or investments. If you're a teenager, you might have decades before you retire. If you're already getting gray hairs and squinting at menus, chances are your time horizon is a bit shorter.

It's important to keep in mind if you're investing because your asset allocation is going to depend on your time horizon.

• If you're very young, you're going to want to invest in things that have the potential for high growth and have higher risk. You have more time to rebound from any problems or losses, and you want to build up your investments as aggressively as possible.

• If you're heading into middle age or having some senior moments, you're going to want to invest more in bonds and other more stable investments because you don't want to be left without money in case the stock market dives again. You may just not have enough time to play with to give the market a chance to rebound.