time horizon

The length of time an investor expects to hold an investment. Time horizon is a key factor in determining an investor's appropriate risk level and investment choices, since longer horizons allow for more growth-oriented strategies. Time horizons for individual investors are typically based on major long-term goals like retirement, a large purchase like a house or perhaps leaving an inheritance. Institutional investors, on the other hand, are required to report their performance at least quarterly and are frequently hired and fired based on three-year returns. This gives individual investors an advantage over institutional investors.