Benefits of Buy and Hold Investments


Buy and hold investments are really the popular choice in investments right now. Prior to 2009, these were very under-utilized but now people are slowly realizing that this is the best strategy that you can do to get a profit off of your investments. You may be wary about trying a strategy that is based in not stalking the movement of the stock market, but patience really will pay off when you stick with this strategy. There are so many reasons as to why this is growing steadily in popularity, which you should consider if you are still deciding if this is the right strategy for you.

To truly see these benefits, you should first see if you are someone who would benefit from this strategy. If you do not need a bulk of money right away and can go without this extra money for some time, this is the right option for you. This is also the right option if you are someone who has a long-term plan, for instance if you are saving for your retirement. These are the biggest reasons why a person would benefit from these options.

By choosing buy and hold investments, you are saving yourself money in the long run. Think about how much you currently spend in fees whenever you make any transactions that require you to buy or sell stocks. This will also help you when it comes to taxes due to a lower tax rate on selling your stock if you waited over a year or two in order to take care of this. You will need to be very patient as part of this strategy but this is a strategy with a high success rate when you invest wisely.

You will also find that this is actually an easier way to invest. You really just do the research to find the stocks and then invest your money. Then you just leave the money there until the times comes where it is beneficial to sell the stock. You do not have the stress of watching the market every day and worry about how the stocks are doing because you are supposed to just let it sit there and earn money consistently. There is a reason why this type of strategy is also referred to as “passive investing”. When you are actively trading, you always have to watch the markets to see when the best time to sell your stocks for a short-term gain.

Here is a look at this using an actual stock example. In January 2008, the Apple stock was at $17.70 per share. Some people sold this as soon as they got a substantial enough profits after a few months, but there are some people that opted to hold onto it for a longer time. In July 2016, these same stocks were up to $95.37 per share. This means that in only 8 years, you got nearly a 50% gain. By doing your research before purchasing stocks, this can really help you to achieve these amazing gains.

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