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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
435
76.78%
16.96%
16.96%
9.72%
2
423
84.87%
36.41%
15.76%
9.08%
3
411
97.32%
58.31%
15.32%
9.08%
4
399
97.74%
82.95%
15.10%
8.87%
5
387
99.74%
114.77%
15.20%
8.71%
6
375
100.00%
152.29%
15.21%
8.52%
7
363
99.17%
195.23%
15.09%
8.30%
8
351
100.00%
241.16%
14.95%
8.07%
9
339
100.00%
297.22%
14.97%
7.98%
10
327
100.00%
368.25%
15.01%
8.02%
11
315
100.00%
457.06%
15.06%
8.07%
12
303
100.00%
550.62%
15.02%
8.09%
13
291
100.00%
660.05%
15.04%
8.11%
14
279
100.00%
798.80%
15.14%
8.11%
15
267
100.00%
964.44%
15.31%
8.12%
16
255
100.00%
1,141.79%
15.42%
8.20%
17
243
100.00%
1,335.11%
15.44%
8.31%
18
231
100.00%
1,538.65%
15.46%
8.38%
19
219
100.00%
1,745.84%
15.45%
8.38%
20
207
100.00%
1,950.91%
15.38%
8.30%
21
195
100.00%
2,207.21%
15.34%
8.17%
22
183
100.00%
2,452.42%
15.25%
8.08%
23
171
100.00%
2,676.51%
15.06%
8.03%
24
159
100.00%
2,963.42%
14.91%
8.03%
25
147
100.00%
3,326.20%
14.86%
8.01%
26
135
100.00%
3,722.37%
14.85%
7.98%
27
123
100.00%
4,198.28%
14.83%
7.92%
28
111
100.00%
4,750.88%
14.77%
7.86%
29
99
100.00%
5,376.41%
14.70%
7.87%
30
87
100.00%
6,326.41%
14.79%
8.09%
31
75
100.00%
7,405.40%
14.90%
8.28%
32
63
100.00%
8,539.94%
14.90%
8.41%
33
51
100.00%
9,368.93%
14.75%
8.49%
34
39
100.00%
10,642.39%
14.70%
8.61%
35
27
100.00%
12,319.73%
14.75%
8.47%
36
15
100.00%
15,070.22%
14.95%
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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