Buy and Hold

An investment technique in which the investor buys shares that are presumably worthy of investment, and holds them for a long time, regardless of fluctuations in the stock market or economy.

Buy and hold is a very complicated issue. Many millionaires were minted in the 1982-2000 bull market, when a bull market that lasted nearly 20 years made many buy-and-holders rich. However, a person who bought and hold blue chips from 1966-1981 would’ve met with an unimpressive result. And investors who bought and held dotcom stocks in the late 1990s and did not sell may have faced catastrophic consequences as their stocks became worthless.

However, Buffett has successful practised a strategy which leans toward buy and hold. He believes that excessive trading only makes the broker rich, and that the best investments are “forever”.

An investor should do more research before deciding whether or not buy and hold is for him/her. As always, investor caveat!

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