Current Events > I need help understanding why people hold stocks long-term.

(+) Yeah! (+)

I'm up about $800 with my current stocks. Shouldn't i just sell them?

Then I can buy different stocks and do the same process.

---

well it's riskier because you could easily be down 800

---

No reason not to sell them and do it all over again.

People hold long-term stocks as an alternative to savings accounts. Stuff like Google, or Amazon, that will 100% make money over 10-20 years, but might "lose" money in a given quarter.

Taxes

---

Less volatility in blue chip or dividend paying stocks.

---

Sell now and pay like half of your wins to taxes or sell in 1 year and pay like only 20%.

Plus day trading is time consuming so most people prefer to just leave them there sitting for a profit vs actively trading for a higher profit.

---

This is only talking about my individual stocks I buy. Most of my investments are in ETFs and low cost funds.

First I save $500 a month to buy stocks with. This goes into an account until I find a stock I want to buy. There are months or years that go by without me buying a stock, sometimes. When I do buy, it is because I think the stock will double sometime in the next few years. Once it does, sell half the stock, then I have however much left in "free" stock. Sometimes if the growth is consistent I will hold it or if I just have a good feeling I will hold it all. Sometimes those turn out to be good dividend earning stocks, in which case I just keep them and sometimes reinvest dividends into the stock, depending on the program they have. And hold for at least a year so you don't pay regular income tax on your earnings, that will hurt compared to capital gains.

In March / April I dropped $10k a pop on Disney, Goldman Sachs, Live Nation, MGM Resorts, and Carnival Cruise. So in the case of Disney, I got in at $85, 120 shares for $10.2k. Now I have to wait until I've held the stock for a year to sell for capital gains tax rate. But come March / April of this year, i will be selling lots of stocks since all of those i bought have since doubled.

You also have dividends, my free ford stock has paid 400% my purchase price since I've owned them.

Or for pure growth, I bought amazon at $35 and Tesla at $130 before the 5:1 split, so equivalent of $26/share.

I don't always win, of course, but it's worked out overall.

---