Investing and English literature classics make for strange company. If the opening lines of Charles Dickens? A Tale of Two Cities are referred to: ?It was the best of times, it was the worst of times? It was the spring of hope, it was the winter of despair?, one could relate to the present situation. Well, is it the winter of despair today?

Investment at all times is a relative perspective. How do you look at the picture? In the week ending December 2, Indian stock markets recovered from the lows of sub-16,000 levels to 16,846. Some call it a relief rally. And to others, it?s a march towards the next high. So, what is this perspective? How do you, as an investor, ensure that wealth is created, capital preserved and regular income stream in terms of dividend and interest income are received? The mantra is investing based on a time horizon, with a goal and asset allocation, riding through the journey.

Now, how do we break the investment into various time horizons: short-term, mid-term, long-term and a life-term? This used to be carried out, albeit in a crude manner, by our elders in the past and, at times, even today.

Buying gold and saving for marriage used to be long-term investments. Setting aside money for education used to be both short-term and mid-term investments. And buying land used to be a life-term investment. The difference is that they did not have multiple options and financial products that we have today at our disposal.

We invest for the long term, but look at short-term returns. This again gets influenced by the inputs shared by your friends, colleagues and relatives. And, then, you pull the plug. Ask a basic question before you make the decision to buy or redeem the investment: Do I know why I?m making this decision and was there a goal and a time horizon?

Once you answer the basic question, let us now stitch a plan based on the various compartments.

Short term ? 0-2 years: Since the fund requirement is over 0-2 years and liquidity and capital preservation are paramount, debt instruments are the preferred route.

Mid term ? 2-5 years: Here, one can have a mixture of debt and equity products, and asset allocation, with portfolio rebalancing carried out to ensure optimum returns.

Long term ? 5-10 years: It is similar to the mid-term compartment, but, here, one can be overweight in asset class based on the risk profile and needs. However, you should not be swayed by the interim volatility and bubble. During the tech boom of late 1990s, Warren Buffet stayed away from the investments in technology companies, which led fellow investors to deride him. But who had the last laugh? Buffet himself.

Life term: This is a perpetual investment and you are not looking for redemption in the near future. Buying land/apartment in an area where you want to live and or retire. Increasing your holdings in the companies which have an economic moat, investing in business ventures, along with the debt and equity options, would constitute your asset allocation.

However, do ensure that the concept of ?buy and hold? is being revisited and retested. So, all investment will go through this test. Since you have categorised your investments into various compartments, the road is much clearer and you can take your decisions based on the compartments.

The days of easy money are slowly coming to an end. The booms in property and stocks of the last decade are now being witnessed in gold and silver. A boom, typically, is followed by a bust. What will help you from going bust is when you become fearful when others become greedy and you become greedy when others become fearful. So, is this a winter of despair or the green shoots towards spring of hope? Only time will tell.

n The writer is founder and managing partner Zeus WealthWays LLP