Buy & Hold

The goal for anyone investing is to make a profit.  A lot of times that profit doesn't come immediately.  Patience is an important part of investing.  When I first got into buying stocks, I only bought to hold for long-term gains (more than one year).  I made some good profits using the buy & hold method, but also took some pretty nasty losses by not having an exit plan. I still buy & hold a portion of my portfolio because it provides some stability and income to my investing.

Over the long run, the stock market has trended up.  This is a good argument for buying high quality stocks and holding them for more than a year to take advantage of annual gains and/or dividends.  My strategy for buying & holding is to research high quality stocks and diversify money into a handful them.  Have a realistic profit target in mind. Likewise, establish a stop point where you will get out of a position if the fundamental picture of the stock changes.

I currently hold mostly stable dividend paying stocks for a longer term perspective.  $FE, $NLY, $COP, $ABT and $T are some stocks I've held over the last couple years.  Some examples of a buy & holds that didn't work out too well -- I bought $BP a month before they had the rig blow up in the gulf.  The day I heard of their problems, I sold for a small loss, which turned out like a good decision.  Another stock $SBAY I got into early on and followed the promise of a growing Chinese economy and internet user base.  I started with a small position but continued to add as it dropped to what I thought was a bargain. I still hold 150 shares at around .07 cents each....not worth selling so I'll continue to hold...but down a lot more than I want to be.

Where I've had success in the buy & hold strategy is researching, understanding the overall market trend, understanding the trend of the stock and buying in when I feel there is a good risk/reward.  I also have an exit plan that I stick with, both profit and stop loss targets.  No one will always buy the low and sell at the absolute high of any trend, but if you can get a good piece of the move, you can be profitable.

~JP