Buy and hold
Buy and hold investing is practiced by a large number of investors. It means to buy shares—preferably in very solid companies—and hold them for a long period, say 8 years or more and perhaps ‘forever’.
This approach to investment is designed to minimise the amount of time you spend watching and evaluating your stocks’ performance once you have bought them, although Buy and Hold doesn’t mean you simply forget about your stocks. Typically, these stocks will also keep paying you dividends, year in, year out, and growing too. The main problem with this low maintenance approach to sharemarket investment is that it’s tempting to forget about your stocks, in which case you may fail to recognise when things are going wrong.
But the strategy has the advantage that brokerage costs are kept to a minimum. In fact, people who have only bought shares in various government privatisations over the past decade have never paid a cent in brokerage. It’s an approach most suitable for investors who are very conservative and want fewer hassles from managing their portfolio.
