BUY HOLDING INVESTMENT STRATEGY

The world's best-known investment strategy is a buy-and-hold strategy. The idea is that if you buy stocks in a fundamentally sound company, the overtime stock should be worth more than the value you pay for it. One of the advantages of a buy and hold strategy is that investors do not have to constantly observe his or her stock. Investors in the early purchase of IBM and GE and other companies, their investment year after year, a substantial increase, not too much effort. Another advantage of this strategy is that you will not spend a lot of commission costs, because you are not constantly trading stocks. This strategy works just fine, as long as there are more bull markets than the bear market.

Buying Holders Investors try to stick to the stock as long as the company is still essentially normal. They do not tend to chase stock charts or news. They just look at the bottom line of the company itself. One of the world's most successful buy-and-hold investors is Buffett. If you look at his many investments, they tend to be bored in the company, rather than flying tech stocks.

The main problem with buying and holding a strategy is that it unfortunately fails in a bear market. Individual investors who hold stocks, whether they find themselves losing everything they have acquired, if they can not recognize the signs of a bear market. This is due to the belief that eventually all the stocks they own will have to be returned to their original price. The truth is that while many stocks may never return to their past glory, which makes buying and holding investors huge losses year after year.

I personally have never had a big fan of this strategy and feel that it blocks potentially huge gains and can use some more hands to get involved in your portfolio. If you are a person who likes to buy and hold a strategy, I still believe that when a bear market occurs, you must use a stop-loss order to protect your investment.

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