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Seven Buy And Hold Tips

This article is about the seven buy and hold investing tips that will help one make better investment decisions.  I hope one will find them helpful.  Let get right into it.

Buy And Hold Tips One

It is the simplest tips.  One must always buy low.  It sounds simple, but that is where many are failing. 

Most of the times, market players just want to buy and hold at any price and cost.  However, one always has the choice to buy and hold at a specific price.  It is about buying the dips where there is a real value.

Buy And Hold Tips Two

Minimise the risks when buying and holding because it does help.  One can minimise the risk of depleting the initial capital by earning cumulative dividends on quarterly basis.  One will also minimise the risk by timing the market for the purpose of a capital growth.  It is also important to minimise the risk by sticking to the 5% money management rules.

Usually, an investor just wants to make money without defending or protecting positions.  It is like leaving a bunch of hundred of dollar bills on a public bench and expect to come back a year later to collect it.  It think that is a wild dream in the wild wild west America.  

Defensive and protective measures must be put in place.  No kidding this time.

Buy And Hold Tips Three

Banking profit in a timely fashion is necessary to avoid letting profitable positions turn into loss.  One does not want that.  Either one is securing really nice profit or one is partially banking some. 

A financial instrument does not always rise in a straight line. There are times of pull back or correction.  An investor can become emotionally driven if he or she is caught up in the ups and downs in the markets.  

That occurrence can lead one to sell unnecessary too late or at loss.  It can also cause one to hold on to positions for too long.

Buy And Hold Tips Four

Only buy and hold financial instruments that will grow in value over few months or years.  I mean financial companies that have a strong balance sheet, and are generating cash in a bullish sector. That is about a clever fundamental analysis.

Buy And Hold Tips Five

Become a value investor.  Really, one that likes to buy and hold must also become a value investor.  An investor that is applying everything that I have stated earlier, but does not know how to invest like a value investor must slowly but gradually try to catch up.  I hope many will do something about that.

Buy And Hold Tips Six

Use a demo account to improve your buy and hold investment strategy.  Some of us have learnt it the hard way by throwing money left and right in the financial markets before we were forced to go back to the drawing board.

With that bitter learning process, I do not wish others the same thing.  Therefore, it is paramount that one is using a demo account while validating those buy and hold tactics.

Buy And Hold Tips Seven

It is not always the right time to buy and hold. There are bullish and bearish seasons.  There are financial markets cycles and corrections. Moreover, it is not rational to buy in an overbought sector when  another sector is oversold. 

To cut a long story short, I recommend that one that wants to buy and hold also learns to master the Elliott wave principle.

The Elliott wave principle will help one to avoid making stupid buy and hold decisions.  I use the word stupid because it is just a lack of knowledge that is causing an investor to buy and hold in a stupid way.

That was exactly the way I felt after I realised that the Elliott wave traders and investors have an edge when it comes to buy and hold market timing. 

One can be banging computers, cursing this and that because of what I have just said.  Nevertheless, one will finally agree with me when one has finally mastered the Elliott wave forecast.

Conclusion

I thought those seven buy and hold tips will be useful to many.  They are easy to grasp, but one must learn to apply them in a practical manner.  Though, there is no unique formula to a successful buy and hold strategy, one can build one's unique buy and hold investing methods that work.

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If you have any questions or comments, please post them at 24stocktrader YouTube channel, and I will answer them or post a relevant video tutorial in due course.

I wish you the very best.
Happy Investing To All

This article is written by
George Beaulieu
Founder Of Stochastic-macd.com