Anticipated Holding Period

Anticipated holding period refers to the length of time for which a limited partnership expects to hold a specific asset. A firm will disclose its anticipated holding period on assets through its prospectus. After the specified time period, the partnership will typically sell the holding, and the capital invested will be repaid to investors through a lump-sum distribution.

An anticipated holding period can help investors determine the approximate length of time for which a limited partnership expects to hold a particular asset before liquidating. Before a broker recommends a potential investment to an individual, he or she should evaluate and disclose the selling firm's anticipated holding periods on underlying assets. The anticipated holding period on assets can affect how investments are graded and therefore recommended to customers. For example, the anticipated holding period on underlying assets can affect mutual funds' share classes.

FINRA – the Financial Industry Regulatory Agency – enforces rules governing broker-dealers, including that they must have "reasonable grounds" for believing that a recommended transaction/investment is suitable for a customer based on his or her financial situation, needs, and investment objectives.