Why 'time horizon' is one of finance's most misunderstood concepts

Why 'time horizon' is one of finance's most misunderstood concepts

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PA's resident behavioural finance expert Greg Davies examines why an investor's time horizon is so often misunderstood…

In investing - as in life - ‘long term' can mean different things to different people. Similarly, one's emotional horizon, although rarely considered at the outset, can sometimes take years off the period of time that an investor stays in the market. While sensible financial advice extols the value of long-term investing, views vary over what 'long term' really means. Similarly, the notion of an investor time horizon remains one of the most misunderstood concepts in finance. First, let's look at what the investment horizon is not: When thinking about your overall portfolio, your time ...

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