"Buy and hold" is an old strategy that was very effective in the past, with a caveat. The idea is that investors would study a company very carefully. If the business fundamentals were strong, then the investor would never plan on selling.
It's like owning a company rather than trading stocks.
The advantage is that shareholders can ignore the noise in the media and in the news and just stay the course. Swings in share price up and down don't mean the company is different. only if something fundamental changed, the investor would hold the shares.
Most investors do not make the returns stated in the perspectus. Frequent trading is one culprit, as is fear-based selling when the price dips. A buy and hold strategy removes this risk.
Dividend paying stocks also support a buy and hold strategy. Just keeping things simple and holding to a stock year after year allows the dividends to accrue (and buy more shares) if not paid in cash. This is not a quick process, but it's been very effective.
Those who don't like a buy and hold strategy say that a company or the economy can change quickly, and what was a good investment last year may not be this year. Macroeconomic events happen quickly, and the tide can turn overnight in some cases.
A middle approach might be plan to hold the stock forever, but monitor on a scheduled basis if the stock is still worth keeping, or if some radical event changed the economic environment in such a way that the company is no longer viable.
If you are tempted to get in and out of the market, or buy and sell company stock frequently, it's worth considering if you are missing out on gains enjoyed by the buy and hold crowd.
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