When a someone starts investing in stocks, he or she will see many investment strategies such as dividend investing, active stock trading, investing in growth stocks, investing in bluechips, etc.
Buy and hold investment strategy is one of the popular strategies like others mentioned above. Whether you invest in stocks or ETFs, you can apply to this strategy. Therefore, when you consider buy and hold investment strategy, you should know the following 5 essential tips about it.
- Buy and hold investment strategy means that as an investor, you buy a stock and hold it for a long time, for instance, for many years.
- When you apply to this investment strategy, you consider that stock markets may increase in the long-term or your stocks will outperform the markets.
- By making effective fundamental analysis when choosing stocks for your portfolio, you will probably get capital gains and possible dividends as an extra income.
- Before starting, you should know your risk profile and get information about investing in stocks.
- By applying to buy and hold investment strategy, you may have some tax advantages by deferring short-term capital gains taxes.