What is  The Buy-and-Hold Strategy in Investment?

Orange Lightning

Investors select quality investments and hold them for years, benefiting from compound interest and potentially lower taxes, here are some things to know.

1

Long-term Focus

You buy investments intending to hold them for years or even decades, Short-term market ups and downs are less important.

2

Patience

This strategy requires patience to ride out market volatility and trust your investments will grow over time.

3

Selection Matters

While holding long-term, you still want to choose good investments, Research companies or choose well-diversified funds.

4

Passive Approach

Buy and hold is passive investing, You buy and hold, not actively trading based on market movements.

5

Lower Costs

Less trading means fewer transaction fees and potentially lower investment management costs.

6

Tax Benefits

Long-term capital gains taxes tend to be lower than short-term gains taxes.

7

Compound Interest

Reinvesting earnings allows your money to grow exponentially over the long term.