Traditional Investing & Portfolio Theory

What is an investment time horizon?

An investment time horizon is the length of time you expect to hold an investment before you need the money for a goal. It is usually grouped as short-term (under three years), medium-term (three to seven years), and long-term (beyond seven years). For example, a retirement goal 20 years out has a long horizon, while a house deposit due in two years has a short one. The horizon shapes how much volatility you can reasonably absorb, since a longer runway gives an asset more time to recover from interim swings.