Hello friends in this video I will talk about buy-and-hold strategy for wealth creation.

Hello friends in this video I will talk about buy-and-hold strategy for wealth creation. Equities are the most fragile mode of investment but are also the most rewarding mode, thus equities should always be viewed as a long-term wealth building tool in the world of investing. There are various ways in which wealth can be created like trading, news based buy and sell, or buy and hold technology, studying fundamentals for investing etc, but the most important is how to buy the right stocks and hold them for a long term to create enormous wealth. It is assumed that buying the stocks for long term tends to create wealth for the investor beating the volatility.

The great investor Warren Buffett who has created enormous wealth over the past few decades has been advocating this strategy. In his writings also he said that the way to create long term wealth in the markets is by adopting the buy and hold strategy but there will be concerns during market turmoil stocks may collect heavily, hence will the strategy work?

So as per the data during the 2008 financial crisis there had been quality names which corrected but can we envisage their price today, they have delivered stellar returns to the investors who have held them since the crisis and many of them have been multi baggers. As for the available data 152 companies listed on NSE has recorded whopping returns anywhere between 1000% to 30,00% percent in a matter of 10 years.

Some of the stocks which have created wealth for the investors are Asian Paints, Marico, Relaxo Footwear, Symphony, Bajaj finance, Avanti feeds, Ajanta Pharma and the list continuous. The source for the data is given in the screen here these stocks have created enormous wealth in the last decade. This does not imply that they did face volatilities but over the period the returns have outweighed the short-lived volatility and thus they became multi baggers. Timing the markets trying to speculate taking news-based decisions on buy and sell etc. brings a high level of volatility unmanageable by most investors. Hence, they end up either wiping their capital or losing a huge sum in short-term.

The phenomenon to buy low and sell high is practically not possible and trying to practice this the investors end up with losing. The investor does panic selling when markets enter sell side without understanding the reason and its impact which may be short-lived, they tend to speculate under the correction and ultimately end up selling their shells due to some short-term events and erode their long-term vision hence they lose out on long term variation in trying to find the bottom for the markets.

One discipline which can be adopted is that rather than waiting for dips offer markets to stabilize which is again a type of speculation. The right time to invest in stocks is to buy when the price is right and sit tight and compound the investment over time. This strategy to buy and hold stocks will help the investors beat the markets and also outweighs gains from other investment vehicles.

Hence this prudent strategy should be practiced to create wealth by stock market investors.