Buy And Hold
Refers to a long term investment approach. A company's stock is purchased with the intent not to sell for a duration which might be from 2 to 15 or even 20 years. Buy and hold is a conservative approach that relies on careful stock selection. Companies with a proven track record of profitablity that have matured into paying and raising their dividend, and establishing a positive earnings record over an extended period of time, are generally good candidates for the buy and hold strategy.
Before You Buy Checklist
1. Check the company's earnings record. A consecutive positive quarterly earnings record is important. Ideally there would not be any negative earnings quarters in the past 10 years. An indication that the company has weathered unfavorable economic cycles. Allowance might be made for major economic and market disruptions like the Covid virus pandemic or the 2008 - 2009 mortgage debacle known as the "great recession". Otherwise, a couple negative quarters in the course of 10 years (40 quarters) might be acceptable.
Almost all the stocks that comprise the Five Year Stellar Stock Index (FYSSI) have the 5 most recent years (20 quarters) of positive earnings reports.
A progressive increase in earnings from past to present would be a plus. Stagnant or decreasing earnings, especially in the recent year or two, might be a sign of trouble ahead. Check out recent financial news for the company on Yahoo finance or similar website. StockEarnings.com. is an excellent website for a company's earnings check up.
2. Check the dividend history at finance.yahoo.com by clicking on “Historical Data” and choosing “dividends”, you can then set the inclusive dates. Or, go to SeekingAlpha.com and click on Dividends then Dividend History or Dividend Growth. The dividendchannel website also offers easy to view historical dividend data.
A progressively increasing dividend through the past 5 or 6 years is favorable. the Five Year Stellar Stock Index (FYSSI) is comprised of companies that have increased their dividend at least 100% in the most recent 5 years past.
3. Check a company's total return to see if the stock has maintained a positive trend in the past 3 , 5, and 10 year periods. Remember; 100% total return is double your money, 200% total return is triple your money and so on. Use the totalrealreturnswebsite or the dividendchannel site to obtain current total return data.
Stocks in the Five Year Stellar Stock Index (FYSSI) have achieved at least 100% and 200% total returns in the last 5 and 10 year durations. Many in the FYSSI have done much better than that.
4. Check the Stochastic and Bollinger Bands that you have built into a chart. Finance.yahoo.com or SeekingAlpha.com or your brokerage will allow you to construct the chart.
Dollar Cost Averaging
Bollinger Bands
Stochastic - Fast and Slow
Dividend Reinvestment
The S & P 500