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Share Market Terms , Definition and Meaning - Alphabetical LISTING - A, B, C, D, E, F, G, H, I, J, K, L, M, N, O, P, Q, R, S, T, U, V, W, Y, Z
Buy and Hold Strategy Accumulating shares of a company over the years for long-term growth benefits and favourable capital gains tax on profits. This requires far less for the investor’s time, than BUY AND SELL STRATEGY, which is frequent trading in shares.
The buy and hold strategy refers to an investment move requiring investors to hold on to their stock for a long period of time rather than getting involved in daily trading. One of the strongest arguments for the buy and hold strategy is the efficient market hypothesis (EMH): If every security is fairly valued at all times, then there is really no point to trade. Some take the buy and hold strategy to an extreme, advocating that you should never sell a security unless you need the money [1]. One of the main benefits of a buy and hold strategy is the easiness of the process.
Market timing is an investing strategy in which the investor tries to identify the best times to be in the market and when to get out.
People who use the buy and hold strategy usually buy stocks or shares from companies they respect and love, companies that have a proven track of success and are here to stay. History has proven that a buy and hold strategy outperforms most attempts to time the market in absolute returns. Investors are usually “passive” in their buy and hold strategy. By its nature, trading requires action while the buy and hold strategy requires sitting on a position for long periods with the expectation that the share price will appreciate in value. Since trading is active while buy and hold is passive, the buy and hold strategy is really best for investors. Turn to mutual funds if you prefer the buy and hold strategy. In other words, using a conservative easy to implement swing trading strategy that used only closing prices for both buying and selling, you would have made OVER 7 TIMES more money than using the buy and hold strategy for the same stock. There are many many factors to decide on when choosing a good investment property for a buy and hold strategy.
You should never buy an investment property under the buy and hold strategy based on emotion or gut feel.
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Share Market Terms , Definition and Meaning - Alphabetical LISTING - A, B, C, D, E, F, G, H, I, J, K, L, M, N, O, P, Q, R, S, T, U, V, W, Y, Z
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