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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
434
76.73%
16.95%
16.95%
9.70%
2
422
84.83%
36.41%
15.76%
9.08%
3
410
97.32%
58.34%
15.32%
9.09%
4
398
97.74%
82.96%
15.10%
8.86%
5
386
99.74%
114.73%
15.20%
8.71%
6
374
100.00%
152.26%
15.20%
8.51%
7
362
99.17%
195.35%
15.10%
8.30%
8
350
100.00%
241.23%
14.95%
8.05%
9
338
100.00%
297.61%
14.98%
7.99%
10
326
100.00%
368.79%
15.02%
8.03%
11
314
100.00%
457.86%
15.07%
8.08%
12
302
100.00%
551.86%
15.05%
8.10%
13
290
100.00%
661.39%
15.05%
8.11%
14
278
100.00%
800.83%
15.16%
8.11%
15
266
100.00%
967.32%
15.34%
8.13%
16
254
100.00%
1,144.91%
15.44%
8.21%
17
242
100.00%
1,338.69%
15.46%
8.33%
18
230
100.00%
1,543.88%
15.49%
8.40%
19
218
100.00%
1,751.74%
15.48%
8.40%
20
206
100.00%
1,957.05%
15.40%
8.31%
21
194
100.00%
2,214.39%
15.37%
8.18%
22
182
100.00%
2,458.50%
15.27%
8.09%
23
170
100.00%
2,679.15%
15.07%
8.03%
24
158
100.00%
2,969.41%
14.92%
8.04%
25
146
100.00%
3,336.76%
14.88%
8.01%
26
134
100.00%
3,736.26%
14.87%
7.98%
27
122
100.00%
4,205.60%
14.84%
7.92%
28
110
100.00%
4,755.83%
14.78%
7.87%
29
98
100.00%
5,380.94%
14.70%
7.87%
30
86
100.00%
6,347.49%
14.80%
8.10%
31
74
100.00%
7,408.39%
14.90%
8.29%
32
62
100.00%
8,514.81%
14.89%
8.41%
33
50
100.00%
9,305.77%
14.73%
8.49%
34
38
100.00%
10,672.99%
14.71%
8.61%
35
26
100.00%
12,314.49%
14.75%
8.44%
36
14
100.00%
15,169.70%
14.97%
8.31%
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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