Hello! Might anyone be able to teach me on buying a stock and keeping it for 5+ years? I mess around on the trading212.com practice account for fun, but even a single fluctuation means I lose the virtual $50000 placed on the S&P 500 in 30 minutes... I thought with stocks, you could buy one then just keep it for as long as you wanted, with max changes being perhaps 20% a year
I'm not sure I understand your question but I suspect I can help. Here is a tutorial on buying a stock and keeping it for 5+ years: - buy stock - wait for 5+ years - sell stock Please understand I have a high need for entertainment. Now that has been taken care of, let's dig in, shall we? Holding an index long term is a straight forward analysis. You are tying yourself loosely to GDP growth which is tied loosely to inflation. As goes the country's fortunes, so go yours. So, you should have the equivalent buying power when you retire for any money you put in a broad index today. Long term hold of stock is buying a company. As the fortunes of the company go, so do yours. When you start looking at 5, 10, 15 year spans, things become pretty random. Who will be running the company when you are ready to sell? Will the goods and services sold by the company still be relevant? Will the industry be disrupted between now and when you want to sell? These things, along with business analysis, need to be considered when thinking long term. I find that over 5 years is nearly impossible to predict, in most industries. This is to the point that most correct predictions will come down to luck. For this reason, I look at my portfolio like a tree farm. The trees I plant this year will be harvested 10 years from now. In order to sell trees this year, I must have planted trees 10 years ago. I put considerable time into finding new companies to own and I'm lucky to find 1 or 2 good companies per year. Remember: Traders own stock. Long term investors own companies.
Further. Since the stock market began, 70% of the gains coming out of it have been in the form of dividends. Only 30% have been growth. Growth comes from the market. Dividends come from the company.
