Many experts advocate a
buy-and-hold
investment strategy, which means you choose solid investments
— usually stocks and bonds in profitable, well-established
companies and the mutual funds that invest in these stocks and
bonds — and keep them in your portfolio through thick and
thin.
Over time, you expect the price of the stocks
to increase, boosting the value of your portfolio. And you expect
that the bonds will pay you regular income. There may even be
added bonuses. A stock might split several times over a 15- or
20-year period increasing the size and potentially the value of
your portfolio if the price returns to pre-split levels. Or, if
interest rates drop, you might be able to sell your older bonds
at a premium.
But keep in mind that if one of your investments
isn’t living up to your expectations when similar ones are
performing better, it’s also strategic to sell it and buy
something else.
