Investing Tutorial 2: Why buy-and-hold stocks


So, you have now decided that you want to invest in stocks for your retirement. The question now becomes: how should you go about it? Well, there are two main approaches to
stock investment. One, is to-buy-and-hold stocks and the second is to trade
stocks. Trading in stocks means you buy a stock when you think it will go up in value and you
sell the stock when you think it will go down in value. That’s a very bad idea for
three reasons. First, it will cost you more. Every time you buy or sell a stock you have to pay a commission. Second, it will
provide a lower return. Research shows that even when professionals
decide to trade in stocks, they make less money than those who buy and hold their stocks.
Lastly, but not least, it takes valuable time. Time which you may not have! Buying and holding a
stock only requires one investment in your time; namely, when you first buy
the stock. Then for the 10, 20, or even 30 years until you retire, while it takes no time at all. And then once it is time to sell again, it takes very little time again to get your money and realize your profit. So, remember the three reasons why you should buy-and- hold stocks: first, it costs less; second, it has a higher return, and third it takes very little time.

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