Investment Horizon

Investment horizon refers to the length of time that an investor plans to hold onto an investment before selling it. It is a key consideration when making investment decisions because it affects the level of risk that the investor is willing to take.

For example, if an investor has a long investment horizon, they may be more willing to invest in higher-risk assets such as stocks or real estate, since they have more time to ride out any short-term fluctuations in the market.

Conversely, if an investor has a shorter investment horizon, they may prefer to invest in lower-risk assets such as bonds or cash equivalents, since they have less time to recover from any market downturns.