Investing is a boring job… You will be amazed about how true these words of Warren Buffett are. Still don’t believe it? Here is the proof, the managers of the Voya Corporate Leaders Thrust haven’t bought any different stocks in their entire life, than those that were selected when the fund was founded. Even more, this fund hasn’t changed its portfolio for the last 80 years. The year 1935 was when the positions of the fund were opened and since then, nothing has changed with them, except their sizes. The thrust has shown really amazing results that have beaten all major US indexes since then. It has beaten more than 98% of all other investment funds for this period. We couldn’t find information about the return on investment for the whole period of 80 years, but we found a nice graphic on their site, showing the return on investment of Voya Corporate Leaders Thrust series B from the year 1970 to the year 2014. It’s simply amazing, you can see the DOW 30 and S&P500 indexes are far from the performance of the thrust:
These results clearly reveal the power of the buy-and-hold strategy. A strategy used by another investment guru and currently one of the richest people in the world – Warren Buffett. All this makes it clear that investing is a really easy and simple job. All you have to do to be extremely successful in it is to find some potential companies, buy some of their stock and just wait. That’s all these guys did and they made it really big. An investment of $1000 in 1970 would have reached the astonishing amount of $122 903 by the end of the year 2014. So, if you are still wondering what investment strategy to employ for your investments, you should really think about the buy-and-hold strategy. Even with a small amount of money, this tactic can make miracles for you and your wallet.
The Buy and Hold Investment Strategy
The concept of buy-and-hold investing is one of the oldest and most reliable forms of investing. It is a time-tested strategy that has been used by investors for decades to generate long-term returns.
In a buy-and-hold strategy, an investor purchases the stock of a single company or multiple companies and holds the shares for a long period of time, typically several years. The goal is to benefit from long-term capital appreciation and dividend payments over the holding period. The investor relies on the company’s performance over time to eventually generate a profit from the stock’s price appreciation, rather than attempting to time the entry and exit points.
Buy-and-hold investing offers investors several advantages. For starters, it eliminates the need for frequent trading, so investors can save time and money by not having to pay broker commissions. Longer-term investments also offer a more stable level of risk than short-term trading, as the bid-ask spread tends to be smaller. Additionally, buy-and-hold investments don’t require the investor to constantly monitor their holdings and can help reduce portfolio turnover.
In an efficient market, the key to successful buy-and-hold investing is conducting thorough research on the company or companies you intend to invest in. It is important to consider factors such as the company’s prospects for earnings growth, current market share, industry trends, and competitive positioning. Investors should also be aware of key metrics such as the price-to-earnings ratio, dividend yield, and debt-to-equity ratio in order to determine whether the company’s stock is a long-term buy or sell.
Ultimately, buy-and-hold investing is considered a safe, long-term strategy for building wealth. By doing the necessary research and selecting quality investments for a long-term holding period, investors can increase the likelihood of success over the long run.
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