Investment Horizon

An Investment Horizon for Stocks indicates the time required to hold a position in a Stock to be adequately compensated for the Market and Stock Specific risks.

The Investment Horizon is a critical part of the analysis, scenario evaluation and decision process, when investing in Stocks. An Investment Horizon covers from the short-term, within the next 12-months to a much longer-term, around 5 years. Investing in Stocks requires a realistic time horizon and 12-months is at least a start. More realistic is 2 to 3 years. A Stock Portfolio is dynamic, a 2-to-3-year Investment Horizon does not mean that positions and the weighting in a Stock Portfolio cannot change. They can change, they must change. Stock markets are changing constantly and an avalanche of information arrives daily. Some short-term stock trading strategies, based on graphs or technical analysis, may work. This is not Investing, this is Trading, and they are two different approaches.