DEFINITION of 'Anticipated Holding Period'

The time period 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.

BREAKING DOWN 'Anticipated Holding Period'

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.

RELATED TERMS
  1. Publicly Traded Partnership - PTP

    A business organization owned by two or more co-owners, that ...
  2. Anticipated Interest

    The amount of interest that a savings vehicle will accrue by ...
  3. Tax Anticipation Note - TAN

    A short-term debt security issued by a state or local government ...
  4. Partnership

    A business organization in which two or more individuals manage ...
  5. Limited Partnership - LP

    Two or more partners united to conduct a business jointly, and ...
  6. IRS Publication 541

    A document published by the Internal Revenue Service (IRS) that ...
Related Articles
  1. Small Business

    What is a Partnership?

    A partnership is an organization where two or more owners operate a business.
  2. Investing

    Interpreting A Company's IPO Prospectus Report

    Learn to decipher the secret language of the IPO prospectus report - it can tell you a lot about a company's future.
  3. Retirement

    What is a Lump-Sum Payment?

    A lump-sum payment is a one-time payment for the total or partial value of an asset.
  4. Investing

    An Insight on the Prospectus of Corporate Bonds

    Making a well-informed decision with respect to buying a corporate bond involves reading the significant facts and details of the prospectus document.
  5. Small Business

    4 Business Partnership Mistakes To Avoid

    When two or more people get together to run a business, the odds of conflict and financial risk increase without the proper controls in place.
  6. Small Business

    MLPs and Limited Partnerships: How They Differ

    Limited partnerships and master limited partnerships have one difference that makes all the difference.
  7. Investing

    Understanding Capital Assets

    A capital asset is one that a company plans on owning for more than one year, and uses in the production of revenue.
  8. Financial Advisor

    Choosing A Financial Advisor: Suitability Vs. Fiduciary Standards

    Discover the differences between the Suitability and Fiduciary Standards when hiring a financial advisor.
  9. Investing

    Explaining Assets Under Management

    Assets under management is a metric that measures the market value of assets that an investment company manages for investors.
  10. Investing

    Selling Mutual Funds: What Happens When You Liquidate?

    Learn about the hidden costs that can be triggered when you redeem mutual fund shares. Even no-load funds have fees and expenses you may not know about.
RELATED FAQS
  1. When does the holding period on a stock dividend start?

    Understand the difference between qualified and unqualified stock dividends, and when the holding period for qualified dividends ... Read Answer >>
  2. What's the difference between limited liability partnership and general partnership?

    Learn the differences between general partnerships and limited liability partnerships; each type has unique traits, benefits ... Read Answer >>
  3. What information does the SEC require in an investment company's prospectus?

    Understand the lengthy list of required information that investment companies such as mutual funds must include in a prospectus ... Read Answer >>
  4. Which terms should be included in a partnership agreement?

    Understand what specific terms should be included in a business partnership agreement and how each affects the partners in ... Read Answer >>
Hot Definitions
  1. Preferred Stock

    A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock. Preferred shares ...
  2. Net Profit Margin

    Net Margin is the ratio of net profits to revenues for a company or business segment - typically expressed as a percentage ...
  3. Gross Margin

    A company's total sales revenue minus its cost of goods sold, divided by the total sales revenue, expressed as a percentage. ...
  4. Current Ratio

    The current ratio is a liquidity ratio measuring a company's ability to pay short-term and long-term obligations, also known ...
  5. SEC Form 13F

    A filing with the Securities and Exchange Commission (SEC), also known as the Information Required of Institutional Investment ...
  6. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
Trading Center