Chapter 6

Time Horizon

He who wishes to be rich in a day will be hanged in a year.

—Leonardo da Vinci (1452–1519), Notebooks, c. 1500

Money is of a prolific generating nature. Money can beget money, and its offspring can beget more.

—Benjamin Franklin (1706–1790), Letters: To My Friend, A. B., 1748

Time is Archimedes’ lever in investing.

—Charles D. Ellis (1937–), Investment Policy, 1985

If you were charged with the task of dividing all the investment alternatives we have reviewed thus far into two groups on the basis of their investment characteristics, how would you do it? One way would be to rank them on the basis of their historical returns and look for a natural dividing line. With reference to the information in Exhibit 3.1, we see ...

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