facebookIs there a difference in term of gains for buy and hold a stock vs buy sell the same stock to take profit? - Seedly

Anonymous

08 Jun 2021

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Stocks

Is there a difference in term of gains for buy and hold a stock vs buy sell the same stock to take profit?

Given no commission fee involved. Buy and hold the stock vs buy and sell to take profit and re-enter etc, is there difference in the gains? I don't really get some articles saying buy and hold can gain more. Isn't buy and sell to take the profit repeatedly gain more than just holding it? Can explain with eg for me to understand or did i get the have misconception?

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If I understand your question correctly, this may be the answer:

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When trading stocks as Contracts For Difference (CFDs) through a broker, you earn the same profits whether buying or selling. It only depends on if you are on the right side of price direction.

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For articles recommending the buy-and-hold strategy (like Warren Buffet often advises), they may be referring to buying the shares of a company. This simply means you will be gaining as the company's stocks are rising in value. So also will you be on the losing side when the stocks start going south.

In theory yes, if you are able to get out before every correction then yes

But in reality this is very difficult to be consistent. The market is down 9% of the time adjusted for magnitude and frequency. Buy and hold usually works better for majority.

Yes. Below is a study. With initial $10k invested. Missing just 5 best day you will lose $265k over ...

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