Stock Market Glossary
Buy and hold
Long-term investment strategy without active trading.
In brief: Long-term investment strategy without active trading.
Meaning in practice
Buy-and-hold investors buy broadly diversified assets (often ETFs) and hold them for decades. Advantages: low costs, low tax burden, benefit from the compound interest effect. Prerequisite: emotional discipline to persevere even through crashes.
Context for investors and traders
For investors, the term becomes practical in the context of objectives, time horizon, risk capacity and costs. A suitable solution can differ between two people even when they consider the same product or metric.
How to use this in practice
Use the term first to describe the situation and add verifiable data: time frame, benchmark, costs and liquidity. Only then does it become an assessment that can be connected to an investment objective and risk budget.
What to keep in mind
Avoid false precision. Many market terms describe probabilities or historical patterns; they neither guarantee a return nor replace the review of a specific security.