Saturday, January 1, 2011

Buy and Hold Strategy

A buy and hold strategy, as the term suggests, is when an investor purchases some shares and holds them for the long term. This investment strategy relies on the premise that over the long term stock prices have historically tended to go up (albeit with due volatility along the way). The strategy is predicated on a low turnover of holdings, as opposed to trading or market timing, where investors try to beat the market.

Synonyms: Long-term investment, Passive investment

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