Buy-and-Hold Strategy

The Buy-and-Hold Strategy is an investment approach where an investor purchases Stocks or other Securities and holds them for a long period, regardless of market fluctuations. This strategy is based on the belief that, over time, the price of the Securities will increase, allowing for Capital Appreciation and potentially providing dividends.

Examples:

• Example 1: An investor buys 100 Shares of Company A at $50 per Share and holds onto them for 10 years. During this time, the Stock price rises to $150 per Share. The investor sells the Shares for a total of $15,000, realizing a significant profit.
• Example 2: An individual invests in an Index Fund that tracks the S&P 500. Over a 20-year period, despite market downturns, the value of the investment grows due to the overall upward trend of the market.

Cases:

• Case 1: During the dot-com bubble, many investors adopted a buy-and-hold strategy. While some Stocks lost significant value, those who held onto fundamentally strong companies eventually saw substantial Returns.
• Case 2: In the aftermath of the 2008 financial crisis, investors who followed a buy-and-hold strategy in quality Stocks experienced recovery as the market rebounded over the following decade.