Buy and Hold Stock Strategy

"Buy and hold" is one of the most common types of stock investment strategies. This is mainly based on the concept that the stock market will give you a certain rate of return in the long run, regardless of price fluctuations in the short term. The reason is that the economy will grow overtime and most investments will end up providing you with a good return, even if they seem to decline in value in the short run.

The buy and hold investment strategy is a passive strategy in which a stock trader buys stocks and holds them for a long period of time, regardless of short-term price movements or fluctuations in the market. The use of such strategy does not necessarily mean that stock traders have to hold a stock forever.

If you want to employ the buy and hold stock strategy, you need to decide on which company to buy and hold and when to release. You should first start out by identifying the strongest performing sector or index. Then you have to target the strongest stocks within the respective sector. This is a relatively simple process and you do not have to worry about the daily fluctuations in the market. However, the main disadvantage of this strategy is that many investors find it difficult to know when to sell a stock.

* Next: Buy Low Sell High Strategy