Buy And Hold

AAA

DEFINITION of 'Buy And Hold'

A passive investment strategy in which an investor buys stocks and holds them for a long period of time, regardless of fluctuations in the market. An investor who employs a buy-and-hold strategy actively selects stocks, but once in a position, is not concerned with short-term price movements and technical indicators.

INVESTOPEDIA EXPLAINS 'Buy And Hold'

Conventional investing wisdom tells us that with a long time horizon, equities render a higher return than other asset classes such as bonds. There is, however, a debate over whether a buy-and-hold strategy is actually superior to an active investing strategy; both sides have valid arguments. A buy-and-hold strategy has tax benefits, however, because long-term investments tend to be taxed at a lower rate than short-term investments.

RELATED TERMS
  1. Sell In May And Go Away

    A well-known trading adage that warns investors to sell their ...
  2. Halloween Strategy

    An investment technique in which an investor sells stocks before ...
  3. Active Management

    The use of a human element, such as a single manager, co-managers ...
  4. Equity

    1. A stock or any other security representing an ownership interest. ...
  5. In And Out

    A trading strategy in which shares of a single security are bought ...
  6. Bond

    A debt investment in which an investor loans money to an entity ...
Related Articles
  1. Tips For Avoiding Excessive Trading
    Investing Basics

    Tips For Avoiding Excessive Trading

  2. Choose Your Own Asset Allocation Adventure
    Investing Basics

    Choose Your Own Asset Allocation Adventure

  3. Finding Solid Buy-And-Hold Stocks
    Investing Basics

    Finding Solid Buy-And-Hold Stocks

  4. Portfolio Management Pays Off In A Tough ...
    Investing Basics

    Portfolio Management Pays Off In A Tough ...

Hot Definitions
  1. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  2. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  3. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  4. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  5. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  6. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
Trading Center