Episode Details

In this episode of pplpod, we break down buy and hold, also known as position trading, an investment strategy where investors purchase financial or non-financial assets like real estate to hold for the long term, aiming for price appreciation despite market volatility. We explore why this form of passive management is recommended by investment legends such as Warren Buffett, Jack Bogle, and Benjamin Graham, who recognize the high correlation between the stock market and economic growth over the long run.

Key topics covered in this episode include:

• The Psychology of Holding: How to overcome recency bias and avoid the urge to sell after a decline in value.

• Cost Efficiency: Understanding how this strategy minimizes transaction commissions and takes advantage of lower long-term capital gains taxes.

• Market Theories: An look at the efficient-market hypothesis (EMH), which argues against frequent trading, and how Warren Buffett applies buy and hold principles even while rejecting the EMH.

• Avoiding Pitfalls: The dangers of market timing and "return-chasing behavior"—buying funds based on high past returns—which can ultimately reduce an investor's profit,.