Pfersching establishes time horizon as the primary architectural principle for portfolio construction, translating the three voyage categories from Chapter 1 into concrete asset allocation mandates. Short-term goals (1-3 years) demand capital preservation fleets composed of high-yield savings accounts, money market funds, and short-term government bonds, explicitly warning against the "rookie mistake" of chasing stock market returns with near-term capital. Medium-term objectives (3-10 years) require balanced armadas combining 40-60% equities with 40-60% bonds, exemplified by diversified ETF portfolios that provide growth while absorbing volatility. Long-term horizons (10+ years) unlock equity-dominated strategies (80-90% stocks) leveraging compounding's exponential power through global diversification. Pfersching critiques the rigid "100 minus age" allocation rule, advocating customization based on income stability and psychological tolerance, emphasizing that purpose-built portfolios aligned with time horizons transform generic "investing" into strategic capital deployment.

Chapter 6: Time as Strategic Determinant

Warren Pfersching