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The starting point must be clarity around your goals. Most importantly, your goals determine your investment time frame. They also dictate whether your investment should have as a priority growth, or income.

If your goal is having the option to retire in 15 years time, then you can invest in assets that experience high levels of volatility. You could also hold assets that are fairly illiquid – that is, not quickly sellable.

Some examples. On the volatility side, as I write this piece, the Asian Share index is the best performer over the past 5 years. It is however also more volatile than the developed markets such as the US and Australia. If you wanted maximum returns 5 years ago, you got the best result through buying the Asian share index. But you only enjoyed those gains if you stuck to your investment and rode out the significant ups and downs. Now with a 15 year time frame, you can do that. If your time frame was 3 years though, an investment in the Asian share index was likely to lead to a disappointing investment outcome.