Buy and Hold


Buy and Hold

An investment strategy in which one does not do any trading on a portfolio between the initial selection of the securities and the end of a certain time period (which is usually a long time). A buy-and-hold strategy ignores short and medium-term trends and concentrates exclusively on the long-term. A buy-and-hold strategy attempts to eliminate any emotional trading that may be done foolishly during a particular bear market. In general, a buy-and-hold strategy yields a solid return as the market trends upward with time. However, it can be exceptionally risky during a prolonged and severe bear market or recession. For example, if an investor had used a buy-and-hold strategy starting in 1929 and had held it throughout the Great Depression, he/she would have had to wait most of his/her life to see a profit on the portfolio. See also: Active investing, Value investing.