How finance folk use it
In finance, medium term generally refers to a period of time that is between 3 and 10 years. In investing, it can vary according to the individual investor and investment product that is being considered.
Is it good or bad?
Knowing your time horizon, or how long you can wait to achieve your goal, plays a big role in helping you see which investment products are right for your situation and needs.
If your time horizon falls in the medium term, you can check out the investment products that are likely to deliver their full potential in this time period. You may also consider debt securities that mature within this term, with the intention of reinvesting both your principal and the interest it earned.
What it means for you
When compared to short-term investing, medium-term investing gives more time to deal with market fluctuations, which may have a positive impact on the results. The returns for products that match a medium-term goal are also usually higher (but this does depend also on your risk tolerance).
