buy-and-hold strategy

Buy-and-hold strategy

A passive investment strategy with no active buying and selling of assets from the time the portfolio is created until the end of the investment horizon. Opposite of active strategy.

buy-and-hold strategy

The investment strategy of purchasing securities and holding them for extended periods of time. Investors using the buy-and-hold strategy select companies on the basis of their long-term outlook. Such investors are not influenced by short- or intermediate-term movements in the price of a security.
References in periodicals archive ?
That is befitting of a buy-and-hold strategy, which is more appropriate for long-term investors and those interested in improving their pensions.
Panel A in Table 1 shows the average returns and basic characteristics of the buy-and-hold strategy for the quintile individual stock.
(2008) found that the program trading rules were superior to the buy-and-hold strategy. Chiang et al., (2012), with the trading data of Taiwan stock index futures market from 1998 to 2008, tested the performances of active and passive trading strategies with the stochastic dominance theory and the results showed that eight active program trading strategies outperformed the passive buy-and-hold strategy before and after the transaction cost.
The buy-and-hold strategy propounds that, in the long run, financial markets give a good rate of return despite periods of volatility or decline.
Second, there should not be a general assertion that non-fee managers are "designed primarily for companies pursuing a buy-and-hold strategy." Again, the choice of an appropriate cash management strategy should be given a more detailed review with deeper fiduciary consideration.
The analysis incorporates the net value realized after the second year which is derived from the proceeds from the stock's sale, total taxes paid and, in the case of a buy-and-hold strategy, the cost of financing to fund the exercise price and tax withholding.
A buy-and-hold strategy means the asset manager plans to invest for the long term instead of chasing the "hot dots." While chasing hot dots may result in greater gains, for taxable investors, those gains may be less beneficial in after-tax terms if they are entirely subject to current ordinary income taxation.
Sharpe (1975) concludes that, even with perfect predictive accuracy, such returns are modest at best (at most five percent) in comparison to a benchmark buy-and-hold strategy. He further suggests that an investor's predictive accuracy should be approximately 70 percent or better for the market timing strategy to yield returns superior to the buy-and-hold strategy.
With stocks enjoying a 10-year bull run, investors have increasingly turned to equity UITs, where a group of stocks is selected for a buy-and-hold strategy. Some equity UITs are based on a particular investment strategy or on an industry sector (See "ABCs of UITs," Moneywise Online, current issue).
No matter how responsible they are, a buy-and-hold strategy isn't in their immediate economic interests.
Diversify your investment portfolio and begin adhering to a buy-and-hold strategy