What is an investment time horizon?
An investment time horizon is the time until savings are needed for a particular goal.
Definition, calculation and mechanism
A near-term essential bill and a distant goal have different capacity for loss. If timing is uncertain, consider liquidity. A longer horizon does not eliminate risk; long-run losses remain possible.
Interpretation, examples and limits
Reassess the portfolio and cash needs as the goal approaches. Inflation makes nominal targets insufficient by themselves. Taxes and transaction costs also matter.
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