An
investment strategy in which one does not do any
trading on a
portfolio between the initial selection of the
securities and the end of a certain time period (which is usually a long time). A buy-and-hold strategy ignores short and medium-term
trends and concentrates exclusively on the long-term. A buy-and-hold strategy attempts to eliminate any emotional trading that may be done foolishly during a particular
bear market. In general, a buy-and-hold strategy
yields a solid
return as the
market trends upward with time. However, it can be exceptionally
risky during a prolonged and severe
bear market or
recession. For example, if an investor had used a buy-and-hold strategy starting in 1929 and had held it throughout the Great Depression, he/she would have had to wait most of his/her life to see a
profit on the
portfolio. See also:
Active investing,
Value investing.