Buy-and-Hold Investing

Buy-and-hold benefits from rising markets but creates an emotionally volatile investment experience. Buy and hold assumes investors can stay invested through severe losses until markets recover. Buy and hold can be dangerous because it treats simplicity as if it were safety. Buy-and-hold investing does not actively control risk because it leaves investors fully exposed to market movements. The article rejects relying on hope as an investing strategy for severe future market outcomes. A buy-and-hold strategy that looks tolerable in hindsight can become destructive when losses are experienced in real time. Continuous market exposure may capture the best days but also exposes investors to the worst days and full bear-market declines. A buy-and-hold investor must absorb sharp market declines such as the S&P 500’s 2008 fall.