Investing in the stock market can double your money every ten years, and Buy and Hold is one of your options when choosing a strategy to start investing.
I started investing with Buy and Hold, also known as investing in dividends and Buy and Hold. Right now, I have three different investment strategies, and one of them remains this. I have already told you it is not my preferred strategy.
When stocks are held for over a year, they usually allude to a drawn-out holding or long-haul venture. Yet, one year is an amazingly significant timeframe for unpredictable and value-delicate business sectors as stock costs can shoot up or down radically inside this period in such cases. You must pick Stocks cautiously. There are numerous systems in the market that you can use to select the correct stock for a long-haul venture.
I don’t like one thing about dividends, and I didn’t know it at first. But don’t hurry; I’ll tell you later.
What are the Buy and Hold?
Buy and Hold (B&H) is a long-term investment strategy based on buying shares of stable companies that distribute dividends and hold them indefinitely. Of course, on occasion, claims will be sold, such as in the event of irreparable deterioration of the company. These types of companies are known as Blue Chips.
It is not enough to make a purchase—that’s it—you must invest continuously (that’s why it’s a long-term strategy).
It is essential to try to buy at the best possible prices, but choosing the right companies is necessary (if we never want to sell, you must choose very well). The objective of the Buy and Hold is to obtain dividend income that allows you to have an extra salary, just as if you bought a property and rented it.
Before, I told you that I have three strategies, and the 3 share these characteristics, so they are not unique to Buy and Hold.
It is investing in the long-term
You are not looking for a punch. The intention is not to buy and sell continuously but to buy and hold indefinitely.
It is investing in the equity/stock market
Therefore, what characterizes Buy and Hold is that you buy shares of large and stable companies that distribute dividends.
Desired Characteristics in Companies – Blue Chips
Companies with continued benefits
If we buy a company to maintain it indefinitely, we must ensure that it always benefits, either in times of prosperity or crisis. We do not want a company that has a bad year every three years or things like that. We are looking for companies with stable and growing benefits.
Large companies
If you want to ensure that the company has a long-term future, you must consider the company’s size. Small companies are easily manipulated and may have problems due to their size, so acquiring large companies with high market capitalization is essential.
Companies that distribute dividends continuously
The key to Buy and Hold is to look for a periodic income, so we want companies to share a portion of their profits as dividends.
We are looking for companies with a good dividend distribution history, not cyclical companies that pay dividends only in the good years.
Companies that have been in the stock market for years
We are looking for companies with a history of benefits and dividends, so companies must take 5-10 years or more in the stock market to have that history.
Many new companies continuously go public, and they get a lot of publicity, so many people invest in them. However, not having a history behind them makes it very difficult to predict whether the bet will go well or not.
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