Definition of Horizon Risk

What is Horizon Risk

Horizon risk is the risk or probability that the investment time horizon may be shortened because of an unforeseen event, which may force a sale of an investment at an inopportune time. If sold when the investment or market is down, there could be a loss.

Glossary of Terms and Phrases

A financial dictionary or glossary is an essential tool to better understand the meaning of a specialized term or phrase. It would obviously make life much easier if everyone spoke the same language and used the same financial terms and phrases but that is not realistic.

We learn new languages to communicate with each other, transact business globally and to appreciate other cultures. Global finance is a specialized language that if understood and mastered, it will provide benefits that help to decrease risk and improve investment returns. Financial literacy is the foundation of developing good investment strategies and sound decision making.

Related Investment Terms

Inflation Risk

Valuation Risk

Volatility Risk