I watched a documentary where an unknown investor named Anthony Deden was interviewed by Grant Williams and explores Tony’s philosophy. The documentary touched on subjects that I have been pondering in my mind. And in this post, I bring a simple subject, but of great relevance: What is your investment horizon?
Your investment horizon is basically how long you intend to invest, and how long you will have your capital invested.
For example, it could be for 6 months, a year, 10 years, 50 years, 2 generations, etc.
It is very important to know what your investment horizon is as your allocation decisions will change depending on your investment horizon.
For example, if you are going to invest for a 6-month horizon, variable income would not be the best option, since in the short term the possible variations could make you withdraw a smaller amount.
I had with me that my investment horizon would be my generation. I would like to be invested for the rest of my life and as I don’t have children, I still didn’t think about an investment horizon of more than one generation. Maybe rethink that horizon now.
One thing that is important when making investment decisions is to remember your investment horizon. Because this will help you make a better decision that is more suited to your investment horizon.
I confess that I haven’t always done this, and I have as my homework to try to do in all my decisions.
I encourage you to reflect: What is your investment horizon?
You don’t have to answer me that, you just have to answer yourself. I believe that this reflection will help you to make more appropriate decisions.
Happy investing!
Photo by Laib Khaled