Investment Horizon
An "Investment Horizon" refers to the length of time an investor expects to hold an investment before needing to access the funds. This period can range from a few months to several decades, depending on individual financial goals and circumstances. Understanding your investment horizon is crucial, as it influences the types of investments you choose, such as stocks, bonds, or real estate.
A longer investment horizon typically allows for more aggressive investment strategies, as there is more time to recover from market fluctuations. Conversely, a shorter horizon may necessitate more conservative investments to preserve capital. Knowing your investment horizon helps in making informed decisions that align with your financial objectives.