When we ran a Twitter poll a little while back, I was intrigued to find out the percentages around respondents’ longest holding period.
In other words, have many of our followers truly committed to The Motley Fool’s philosophy of buy-and-hold investing?
The results are in
Here at the Fool, we strive for a minimum holding period of three to five years. But, to paraphrase the great Warren Buffett, our favourite holding period really is “forever“.
I would have been disappointed to see ‘Under a year’ get any significant traction, if I’m honest. Because, unless you’re a very new investor, then this suggests an element of trading.
By trading, I’m referring to buying and selling in quick succession. Many might think this is a fast-track method to “making a quick buck”. However, a lot of the time it can be hugely speculative.
That’s because most traders aren’t buying the stock based on the company’s fundamentals, but rather due to ‘noise’ surrounding its promise.
And, simply put, you can’t qualify noise, can you?
Additionally, we Fools are acutely aware that in the majority of cases, it costs extra money to buy and sell shares. I’m talking stamp duty, commission, etc.
So when you’re trading — again, frequently buying and selling positions — you’re inevitably incurring a lot more money than when you’re selective and only buy shares in companies that you’re willing to keep in your portfolio for many years.
To circle back to the start of this post, it’s pleasing to see a third of respondents answer with a very Foolish three to 10 years.
Even more so to see the second most popular holding period being 10+ years!
Personally, I’m a little shy of that decade marker with the shares in my portfolio that I’ve held the longest.
But, like a true Fool, I’m trusting in the investment case for the stocks I still believe in, and continue to hold throughout this market turbulence.
And I’ll definitely be ‘starting from day one’ with a few new additions soon. Complete with a Buffett-esque view to keeping them forever!