← Back to the glossary
Glossary entry · Trade-offs
Buy and hold
Definition
A strategy of buying quality investments (usually broad-market index funds) and holding them for very long periods, ignoring short-term price movements. Backed by decades of evidence: most active traders underperform a boring buy-and-hold investor over 10+ years, after fees and taxes.
Example
Warren Buffett: "Our favorite holding period is forever."
Related
Trade-offs
Risk
The chance that an investment loses value — and how much it could lose.
Read →Volatility
How wildly an investment's price moves up and down. High volatility = bigger swings.
Read →Diversification
Spreading money across many different things so no single one can sink you.
Read →Bull & bear market
Long stretches of rising prices (bull) or falling prices (bear). Both end, eventually.
Read →