Strategy · Long-Term
BUY AND HOLD
BullishDefined riskBeginner
Overview
A passive investment strategy where an investor buys stocks or ETFs and holds them for a long period, regardless of short-term market fluctuations. The most proven wealth-building approach for most investors.
Setup
- 1.Identify high-quality companies or broad market index funds.
- 2.Purchase shares.
- 3.Hold for years or decades, reinvesting dividends.
Max profit
Theoretically unlimited as stock prices can rise indefinitely.
Max loss
Total amount invested (if stock goes to zero, which is rare for diversified portfolios).
Breakeven
Purchase price plus fees.
When to use
When you believe in long-term economic growth and have a 5+ year time horizon.
When to avoid
When you need the money in the short term or if a company's business model is permanently broken.