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What is Risk Horizon?
For example, you have an investment objective and the objective is to get from point A to point B by a certain period of time. That certain period of time is your Risk Horizon.
It is similar to time horizon, except that, instead of talking about how long it takes to do certain things, which is determine by time horizon, Risk horizon is the estimating of how much risk to take for that period of time you are invested.
A typical Risk Horizon of an investment plan can be long-term, medium-term or short-term. The term is subjective and it all depends on the time horizon an investor has.
For example, you have an investment objective and the objective is to get from point A to point B by a certain period of time. That certain period of time is your Risk Horizon.
It is similar to time horizon, except that, instead of talking about how long it takes to do certain things, which is determine by time horizon, Risk horizon is the estimating of how much risk to take for that period of time you are invested.
A typical Risk Horizon of an investment plan can be long-term, medium-term or short-term. The term is subjective and it all depends on the time horizon an investor has.