Buy+and+Hold

By Jimmy and Jeff (edited by Mercedes and XY) __**Buy and Hold:**__ //Definition:// Buy and Hold is an investment strategy where an investor buys stocks and hold them for a long period of time.

Buy and hold investors believe that short-term trading, when people enter in the lows and sell on the highs does not work and that attempting to time their trades according to the volatile ups-and-downs of the market is for small and unsophisticated investors According to the Efficient Market Hypothesis, every security is fairly valued at all times, so there is no real value to trading. More extreme advocates of the EMP may encourage never selling stocks unless you need the money.
 * Why do people do this? **

Advantage: - Tax Benefits: Long term investments tend to be taxed at a lower rate. - most likely a 10% return each year on the initial investment, with minimal-to-acceptable risk

When should you sell your stocks? 1) When Company files for bankruptcy. 2) Company indicates accounting problems or theft.

Great Sites to learn about Buy and Hold: 1) [|http://www.investopedia.com/terms/b/buyandhold.asp#axzz2LJcBNckr] 2) [] 3) []

Great Video about Buy and Hold: media type="youtube" key="Z48xR-TBL-8" height="315" width="560"

Questions: 1) What is the advantage of using this investment method? 2) Give an example of Buy and Hold. 3) When should you sell your stocks?