Custom Search

Introduction to Buy-and-Hold Investing

Buy-and-hold investing is a simple approach that many long-term investors use to make money. With buy-and-hold investing you buy stocks and hold them for many years. Patiently owning a diversified portfolio of stocks with steady price appreciation and rising dividends coupled with dividend reinvestment can lead to substantial profits.

The following table table shows buy-and-hold returns for Johnson & Johnson (JNJ), a global personal care and pharmaceuticals company.


Holding Period Results
# Years Held
Number Returns
Frequency of Profitable Returns
Average Annualized Return for S&P 500
1
433
76.67%
16.95%
16.95%
9.68%
2
421
84.80%
36.45%
15.77%
9.09%
3
409
97.31%
58.40%
15.33%
9.09%
4
397
97.73%
82.99%
15.10%
8.86%
5
385
99.74%
114.75%
15.20%
8.70%
6
373
100.00%
152.32%
15.20%
8.51%
7
361
99.17%
195.53%
15.10%
8.29%
8
349
100.00%
241.34%
14.95%
8.03%
9
337
100.00%
298.04%
14.99%
7.99%
10
325
100.00%
369.45%
15.04%
8.04%
11
313
100.00%
458.74%
15.09%
8.09%
12
301
100.00%
553.18%
15.07%
8.11%
13
289
100.00%
662.94%
15.07%
8.12%
14
277
100.00%
802.90%
15.19%
8.11%
15
265
100.00%
970.26%
15.37%
8.14%
16
253
100.00%
1,148.39%
15.47%
8.23%
17
241
100.00%
1,342.58%
15.48%
8.35%
18
229
100.00%
1,549.20%
15.53%
8.42%
19
217
100.00%
1,758.03%
15.51%
8.42%
20
205
100.00%
1,963.92%
15.43%
8.33%
21
193
100.00%
2,222.18%
15.39%
8.18%
22
181
100.00%
2,465.12%
15.28%
8.09%
23
169
100.00%
2,683.95%
15.07%
8.04%
24
157
100.00%
2,976.83%
14.93%
8.04%
25
145
100.00%
3,349.21%
14.90%
8.02%
26
133
100.00%
3,749.76%
14.89%
7.99%
27
121
100.00%
4,214.80%
14.85%
7.93%
28
109
100.00%
4,763.08%
14.78%
7.87%
29
97
100.00%
5,393.05%
14.71%
7.88%
30
85
100.00%
6,373.50%
14.82%
8.11%
31
73
100.00%
7,408.43%
14.90%
8.30%
32
61
100.00%
8,496.45%
14.88%
8.41%
33
49
100.00%
9,271.87%
14.72%
8.49%
34
37
100.00%
10,731.87%
14.73%
8.62%
35
25
100.00%
12,360.46%
14.76%
8.42%
36
13
100.00%
15,387.92%
15.02%
8.30%
All return data are based on monthly closes (adjusted for splits and dividends) from January 1980 to the present from Yahoo! Finance.

Here are ten more well-known stocks that have consistently made money for long-term buy-and-hold investors: 3M, Clorox, Coca-Cola, Colgate-Palmolive, Exxon Mobil, International Business Machines, Kimberly-Clark, PepsiCo, Proctor & Gamble and Sherman-Williams. See S&P 500 buy-and-hold returns for comparison.

Use the Stock Holding Period/Return Calculator to see long-term buy-and-hold returns for your favorite stocks.


Related Articles

Introduction to Dividend Reinvestment
Introduction to Dollar-cost Averaging
Introduction to Portfolio Diversification