Investment Time Calculator

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What Is an Investment Time Horizon?

An investment time horizon, or just time horizon, is the period of time one expects to hold an investment until they need the money back or want to rach a certain financial goal. Time horizons are largely dictated by investment goals and strategies. For example, saving for a down payment on a house, for maybe two years, would be considered a short-term time horizon while saving for college would be a medium-term time horizon, and investing for retirement, a long-term time horizon.

Key Takeaways

  • Time horizons are periods where investments are held until they are needed.
  • Time horizons vary according to the investment goal, short or long.
  • Time horizons also vary according to the time by which you begin investing.
  • The longer the time horizon, the longer the power of compounding has to work.
  • Generally speaking, the longer the time horizon, the more aggressive an investor can be in their portfolio, and vice versa.

Learn more at Investopedia