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The relevance of the “Buy and Hold” strategy

This is how the human brain and consciousness work, that it is much easier for any investor to buy assets than to make money on sales transactions.
Everything is very clear with the purchase, I bought shares, and after they rose in price, I sold them for a profit, and even received dividends.

Buying cheaper and selling higher is, so to speak, the natural desire of every speculator, and even if everyone around is buying, it seems that it is almost impossible to make losses in this strategy.

This strategy is applicable not only to the stock market, but also to the precious metals or real estate market.

People often think about how much they could earn by buying and then selling, rather than how much they would have lost after the price of a particular asset fell.

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It is for this reason that the “Buy and Hold” strategy found a lot of followers; the peak of its popularity occurred in the 80-90s of the twentieth century. When the US stock market began to go uphill at a rapid pace.

Moreover, the popularity of investing in the stock market was not hampered even by price collapses that were repeated with enviable regularity. 

The essence of the “Buy and Hold” strategy

The basic idea behind buy and hold is to buy an asset and then hold it until selling it at a higher price.

The strategy involves making long-term investments for a period of a year or more, since it is planned that it is in the long term that the biggest money can be earned.

Suffice it to recall the history of the stock price of Apple, which in 20 years has risen in price from 1 dollar to 200 dollars per share. And everything becomes clear.

One of the most prominent proponents of this strategy is Warren Buffett; the most surprising thing is that he is almost the only supporter of the “Buy and Hold” strategy among investors of this scale.

At one time, Buffett bought quite a few undervalued shares, and sometimes entire companies, which later brought billions in profit.

Therefore, we can say that the basic principle of buy and hold is that you need to buy securities of companies whose value is not yet high, but whose development potential is quite significant.

Usually these are shares worth no more than 1-5 dollars per share that recently appeared on the stock exchange; the profitability of the company and the amount of dividends it pays per share also play an important role.

How relevant is the buy and hold strategy? 

Currently, it seems that everything that should have gone up in price has gone up in price, and there is no point in buying Apple for $200 or Microsoft for $300, much less Amazon for $1600. Especially after the latest collapse in exchange rates.

In fact, everything is not so sad; even now you can find inexpensive shares of companies at quite reasonable prices and good growth prospects. Many investors choose securities worth no more than $10 for long-term investments.

This primarily applies to Internet companies and securities from the European market segment. Where prices are still not that high.

Shares that are just entering the stock exchange are also very popular; you can find out how to subscribe to the first placement here - https://time-forex.com/inv/akcii-ipo

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