Holding Period

What is Holding period.?

Holding period refers to the expected or real duration within which an investment can be attributed to a particular investment. In a broad way, it can be best explained as the time between the purchase and sale of an asset. Alternatively, it is also defined as the duration between the time a short seller first borrows an asset from a brokerage, and the time when it is sold back.
Ads by Google

The holding period for a given investment has a multitude of application on different fronts. For example, it helps in the assessment of the overall performance of an investment, evaluating it’s net gain or loss as well as in deciding whether or not the investment was worth it.

Apart from that, the holding period of an investment is also used for determining the manner in which a capital gain or loss must be taxed (this is because short term investments are usually taxed at a much lower rate than long term ones).

Edited and Updated 15th February 2014

You can leave a response, or trackback from your own site.

Leave a Reply

You must be logged in to post a comment.

Powered by WordPress