The overall return earned from owning an asset or portfolio of assets over time—referred to as the holding period—is known as the holding period return and is typically stated as a percentage.
The overall return earned from owning an asset or portfolio of assets for a given amount of time is hence known as the holding period return. This return is typically stated as a percentage. Based on overall returns from the asset or portfolio, holding period return is computed (income plus changes in value). It is especially helpful for comparing the returns of assets kept for various lengths of time.
The holding period determines the tax consequences and runs from the day after the security is acquired to the day it is sold or disposed of. When comparing returns on investments bought at various points in time, the holding period return can be helpful.
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