The Buy and Hold investment strategy is basically the opposite to day-trading. Traders that use this strategy buy a certain portfolio of cryptocurrencies, shares or currencies and hold them. In the case of this investment, it is advisable to spread the purchases in time into several phases. The ideal minimum number of phases for this strategy is three or four. In case of a downturn, the following purchase should be in a different instrument in order to offset the cost of the risk. Furthermore, it is not advisable to have an investment account with high leverage. This is because your portfolio’s value could quickly fall if there are abrupt price movements. It is also worth mentioning that this type of investment benefits from portfolio diversification. The rule of thumb when applying a buy and hold strategy is to have at least between five and ten instruments.

Advantages of this investment strategy

A big advantage of the long-term investment is the fact that you do not have to track daily what occurs on the markets and you have an overview of what you invested the money into. If you made a purchase for free instruments, simply wait. It is, however, recommended to conduct a review on the development of investments once per month.

However, be careful of your current mental state. Although it may seem that this strategy is easier than day trading, numerous stakeholders dismiss their positions after the first decline and loss and withdraw profits with a small increase. It is really crucial to stick to what you determined as the investment horizon.

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