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Sagot :
The most appropriate time horizon for the portfolio to start funding for retirement at age 65 is 35 years
What is time horizon?
- Investments are held during time spans until they are required. The time horizon varies depending on how long or how short the investment aim is.
- The moment you start investing will also affect your time horizon. The power of compounding must operate for a longer period of time the longer the time horizon.
It is reasonable to anticipate that these clients, who are 40 and 45 years old, will live for another 30 to 40 years.
Therefore, their investment portfolio should have the time horizon of 35 years.
To know more about the compounding and discounting, here
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