What is the time horizon?

Time horizons are simply the duration that the investor expects to use the amount of money with a given investment or set of investment. The time horizon, sometimes referred to as an investment horizon or simply horizon, describes a period that begins at the time of purchase and ends in selling the purchased options or security. The time horizon may be a matter of seconds or to represent a period that lasts for decades.

Setting the time horizon for any investment usually applies to the objectives and goals of the investor. For example, if an investor tries to invest in short -term possibilities as a way of financing the purchase of a house in five years, this goal will help define the circuits of investment activities. The investor will actively seek ways to invest money in securities and the possibilities that will create a sufficient return at the end of this five -year period to allow the purchase of a house within a specified price range.

at the same time may be a longer time horizon in accordance with CThe investor. This is especially true if the main objective of investment activities is to create a solid financial base for retirement years. In this scenario, the investor is likely to migrate to invest over the years with a consistent growth formula, with the expected small to no decline. The time horizon for this approach can take thirty years or more.

daily traders are an excellent example of investors who indulge in an extremely short or investment horizon. Since business activity can be crazy, it is possible that the same security will be purchased and sold in seconds. This activity often allows the trader to use a sudden jump jump and sell safety before the unit price returns to the former level. As a result, trade day can make a significant return in an extremely short period of time without available resources available for a long time.