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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
436
76.83%
16.95%
16.95%
9.73%
2
424
84.91%
36.39%
15.76%
9.07%
3
412
97.33%
58.24%
15.30%
9.08%
4
400
97.75%
82.89%
15.09%
8.87%
5
388
99.74%
114.76%
15.21%
8.72%
6
376
100.00%
152.20%
15.20%
8.52%
7
364
99.18%
195.06%
15.09%
8.31%
8
352
100.00%
241.03%
14.95%
8.09%
9
340
100.00%
296.75%
14.95%
7.98%
10
328
100.00%
367.60%
15.00%
8.01%
11
316
100.00%
456.20%
15.04%
8.07%
12
304
100.00%
549.30%
15.00%
8.09%
13
292
100.00%
658.55%
15.02%
8.10%
14
280
100.00%
796.71%
15.12%
8.11%
15
268
100.00%
961.53%
15.28%
8.11%
16
256
100.00%
1,138.42%
15.39%
8.18%
17
244
100.00%
1,331.07%
15.41%
8.28%
18
232
100.00%
1,533.25%
15.43%
8.36%
19
220
100.00%
1,739.87%
15.42%
8.36%
20
208
100.00%
1,944.08%
15.35%
8.29%
21
196
100.00%
2,199.76%
15.32%
8.16%
22
184
100.00%
2,445.20%
15.24%
8.08%
23
172
100.00%
2,671.80%
15.06%
8.03%
24
160
100.00%
2,956.25%
14.90%
8.03%
25
148
100.00%
3,315.19%
14.84%
8.00%
26
136
100.00%
3,707.75%
14.83%
7.98%
27
124
100.00%
4,188.78%
14.82%
7.92%
28
112
100.00%
4,741.11%
14.76%
7.86%
29
100
100.00%
5,370.57%
14.69%
7.87%
30
88
100.00%
6,302.68%
14.78%
8.08%
31
76
100.00%
7,383.44%
14.89%
8.28%
32
64
100.00%
8,545.81%
14.90%
8.41%
33
52
100.00%
9,397.42%
14.76%
8.49%
34
40
100.00%
10,583.30%
14.68%
8.59%
35
28
100.00%
12,259.92%
14.74%
8.49%
36
16
100.00%
14,897.53%
14.91%
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.


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