A Buy & Hold investment strategy is exactly what it sounds like, a passive approach that involves purchasing and holding investments over an extending period, regardless of market fluctuations. It requires patience, discipline, and a long-term perspective, an investor must be willing to withstand a multitude of market dips in order to reap the potential rewards of long-term growth.
This method is a popular investment strategy that emphasizes a long-term prospective and aims to remove emotions form the investment process. However, it is important to note that the buy & hold strategy can result in larger drawdowns in bear markets. Despite this, investors with a long-term horizon, that can stomach extreme volatility from time to time, face a very small chance of losing money, as the S&P 500 has historically posted positive returns for most 20-year time periods. This makes a buy & hold approach an attractive option for those seeking to build wealth over the long term. Past performance is not a guarantee of future results.