Buy & Hold: A Sure Way to Wealth?

I spend a lot of time reading about building wealth because it’s one of my passions. But very rarely do I give any time to thinking about that old tried-and-true strategy of Buy & Hold.

Yeah, remember that? You create a plan. But your stocks/funds/bonds. And then hold on to them for the long term.

Not every exciting. But then, it’s not supposed to be. And today, Andrea Coombes reintroduced me to Buy & Hold with a great article on MarketWatch.com.

Andrea confesses to being a Buy & Holder. Most of her portfolio is in 2 retirement accounts. And no matter what the market does, she doesn’t change her allocations. And in those accounts? Just a routine mix of low-cost U.S. and international stock mutual funds and a bond fund. That’s it.

And she writes about finance for a living? Does she know something we don’t?

Andrea figures that no matter what the market does in the short term, the average historical returns will benefit her. Plus, she sees stock-market trading as little more than a guessing game, unless you devote a ton of time to it.

So, what are her 3 requirements for being a prudent Buy & Hold Investor? A diversified plan, of low-cost index funds, for the long term.

What do you need to do to become a successful Buy & Hold Investor? Just follow her 5 simple steps:
1. Create a plan.
2. Set your plan and forget it.
3. Accept risk.
4. Stay in for the long haul.
5. Do everything you can to ensure diversification.

So, if you’re interested in Buy & Hold, check out Andrea’s article. And let us know what you think of this strategy.