According to great investment gurus like Benjamin Graham and Warren Buffett, buying and holding for years together is a better way than booking partial profits from time to time. Now, when the goal is long-term wealth creation, please give your expert view in terms of direct equity and mutual funds.
-Jeetendra
We are in no position to even cast a doubt on the views of such investment gurus. This is a hypothesis which one can't question, but there are a lot of assumptions based on this premise that you buy a stock and hold it for the long-term. There are a couple of things which should be kept in mind. The stock should be a bargain when you buy it. It should be a company which has a high-quality management, a management which keeps you, as an investor, as a partner and they conduct their business in a way which is in the best interest of the investors, hence, enhancing shareholders’ value. The other thing is that it should be in a line of business which can withstand the test of time. If you are able to choose one such company after combining all these factors together, then you can hold it for the long-term. You also need belief in the market, time, understanding and inclination to do this successfully and with conviction.
This article was originally published on February 15, 2012.
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