The term long haul investor or long-term horizon is still a good benchmark to measure when assets will be used such as in retirement modeling. But the Ibbotson mountain chart that highlights long term gains could be misleading if the clients are unaccustomed to experiencing losses. Again, a risk tolerance test can help determine your client’s disposition towards market exposure.
A young conservative couple may have time on their hands, but not the heart to go through down markets, bear markets and black swan events. Their psychological profile may be more emotive than economic, more feeling driven than financially motivated. You can tout the long term upward move of the market, but if they can sleep, then you need to position them in products that reflect their conservative or fragile nature.
You can’t trumpet the virtue of long-term horizons when your clients can see past present losses. Many advisers and insurance professionals are always on the hunt for alpha, but the associated beta risk may be too great for your client’s personality.