Holding period

Holding period is how long a position has been held. For a closed position it is how long you held it before selling.

On its own it is a simple fact. Its value is as the denominator you supply mentally to every other return figure in the table.

Why it matters

A 40% return means nothing until you know across how long. Over eight months it is remarkable; over eight years it is roughly 4% a year. The return column shows the 40% in both cases, because it is a total return rather than an annualised one.

This is why holding period is one of the default columns on the closed positions table. Once a position is sold, the two things worth knowing are what it returned and how long that took, and either alone is misleading.

Comparing positions

The trap is ranking holdings by return percentage without looking at this column. A list sorted by return will put long held positions at the top almost regardless of how well they have actually done per year, simply because they have had more time to accumulate.

For a like-for-like comparison of rate rather than total, the money-weighted return is the figure that already accounts for time, since it is expressed as an annual rate.

What starts the clock

The holding period runs from your first purchase of the position, not from your most recent one. Adding to a position you have held for years does not reset it. That matches how people think about a holding, though it does mean a position where most of the money arrived recently can still show a long holding period.

Gylder does not attach any tax meaning to this figure. It is a description of how long you have held something, nothing more.