DEFINITION of 'Grey Wave'

An investment or company thought to be profitable in the long-term or very long-term. The investor should not plan for an immediate or even short-term positive return, but rather only when s/he is much older and has grey hair.

BREAKING DOWN 'Grey Wave'

Grey wave is related to one of the most critical investing concepts - time horizon. Before making investment decisions an investor needs to take into careful consideration when s/he will need to either withdraw the principal or begin drawing down on the dividends and return. The longer the time horizon the more room an investor has for potential mistakes, to adjust to market swings and to benefit from compounding interest.

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