The Pros and Cons of Buy and Hold Investment Strategy

The Pros and Cons of Buy and Hold Investment Strategy

Since a long time we have always looked up at the scopes and financial efficiencies through right investment methods and returns, especially in the recent times of debt when all of us are struggling and juggling with the help of debt settlement companies. Here I would like to draw the reader's attention to the positive and negative of buy and hold investment strategy. In theory, a perfect investment strategy would be cheap, easy and risk-free. It would make you fabulously rich in about a week. And over the long run, the Ultimate Buy-and-Hold Strategy has produced higher returns than the investments that many people hold. But there certainly are some drawbacks of this system which cannot be ignored. Even though this strategy is based on academic research, it's really fairly simple. The Ultimate Buy-and-Hold Strategy uses no-load funds to create a sophisticated asset allocation model with worldwide equity diversification by adding value stocks, small company stocks and real estate funds to a traditional large-cap growth stock portfolio. Before we get into the meat of this strategy, there are a few things you should know. Every investment and every investment strategy involves risks, both short-term and long-term. That means investors can always lose money. The Ultimate Buy-and-Hold Strategy is not suitable for every investment need. It won't necessarily do well every week, every month, every quarter or every year. Like most worthwhile ways to invest, this strategy requires investors to make a commitment. If you are the sort of investor who dabbles in a strategy to check it out for a quarter or two, don't even bother with this. You will be disappointed, and you'll be relying entirely on luck for such short-term results.

The Ultimate Buy-and-Hold Strategy is not based on anything of what had happened in that past or what is going to happen in the present money market industries and investment markets; it cannot identify the most profitable investment products and sectors. Rather the strategy is designed to produce very-long term results without requiring much maintenance once the pieces are in place. The most important building block of this strategy is your choice of assets. Many investors think success lies in buying and selling at exactly the right times, in finding the right gurus or managers, the right stocks or mutual funds. Your choice of asset classes has far more impact on your results than any other investment decision you will make. It is far more important than exactly when you buy or sell those assets. And it's much more important than finding the very "best" stocks, bonds or mutual funds.Thus among the advantages of buy and hold investment one can include savings on commissions and taxes and saving oneself some stress as well. But a major point against this strategy is that you can never be sure of the stocks you have picked especially in current market when a lot of blue chip and reputed companies are going bankrupt overnight. Thus besides choosing the right investment options, the investor should also keep in mind the apt investment strategy as well in order ascertain higher returns on investment.

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