Wednesday, April 23, 2008

Buy N' Hold

A value investor strategy would be to buy a stock with the idea of buying a part of the company and planning on holding on to it for a long time. If the stock market were to shut down for 5 years, you should still be happy holding onto your piece of a business. If you go into an investment with that strategy in mind, you are bound to be better off than trying to buy a stock and flip it for a quick profit, because it can very easily go the opposite way as you had hoped, they you are SOL...

I say this because I tried to make a virtual few bucks by following two stocks. In my head it got the point where I was sick of them going up and going down, and not breaking much more than what I have paid. So it got to the point where I would sell them...and then, two days later for one, and about a week later for the other they jumped in price dramatically....very disappointing. It makes you think, you really need to research your investments and make sure you know how you expect the company to do so that you can handle little bumps in the road when it goes down a few points.

What I would want people to take away from this post is, make sure you research all investments totally so you are confident in what they are going to do. And if you buy a good company, with good management and a good product, you should not have to worry about selling it for a long time, just hold on to it until you have made a satisfactory gain, to the point where if it continues to go up after you sell, you will still be happy with the gain you made.

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