The Merits of buy and Hold Strategy in International Financial Markets

Samuel Tabot Enow ()
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Samuel Tabot Enow: Research associate, The IIE Varsity college, Durban, South Africa

Journal of Economic and Social Development, 2023, vol. 10, issue 02, 01-05

Abstract: In the dynamic world of investment, numerous strategies have emerged and keep evolving over time. One such strategy that has stood the test of time is the buy and hold strategy which is favored by many successful long-term investors which focuses on acquiring quality assets and maintaining a long-term investment horizon. A buy and hold strategy is a long-term investment approach that involves purchasing assets and holding onto them for an extended period, regardless of short-term market fluctuations. Understanding the merit of this strategy in financial markets can empower investors to make informed decisions and develop a disciplined investment mindset for achieving their financial goals. Accordingly, the aim of this study was to empirically explore the merits of a buy and hold strategy in financial markets due to its perceived significant impact for active market participants. A Sharpe ratio was utilized for six financial markets from June 13, 2018, to June 13, 2023. The findings revealed that market participants can use a buy and hold strategy in the Nasdaq, CAC 40 and Nikkei 225 to enhance the value of their portfolio over a long-term period. Upon selecting a particular risk tolerance and investment horizon, market participants may earn significant returns on their portfolios.

Keywords: Buy and Hold Strategy; Financial Markets; Fundamental Analysis; Behavioral Finance (search for similar items in EconPapers)
JEL-codes: A11 (search for similar items in EconPapers)
Date: 2023
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