A buy-and-hold investment strategy

Question

Quizplus · Accepted Answer

A buy-and-hold investment strategy avoids trying to time the market and instead focuses on holding investments for the long term. This minimizes transaction costs since there are fewer trades being made. It also postpones capital gains taxes as the gains are not realized until the investments are sold. Finally, holding investments for the long term means that any gains will be taxed as long-term capital gains, which are typically taxed at a lower rate than short-term gains. All of these benefits make a buy-and-hold strategy a sound approach for many investors.

A Buy-And-Hold Investment Strategy