Investing in the long-term: an empirical approach

Authors

DOI:

https://doi.org/10.20525/ijrbs.v13i4.3276

Keywords:

Buy and Hold strategy; Financial markets; Fundamental analysis; Behavioral Finance.

Abstract

There has been a proliferation of numerous investment strategies over the years, but one strategy is perceived to have stood the test of time. Investing in the foreseeable future is favored by many successful long-term investors which focus on maintaining a long-term investment horizon. Investing in the long term involves purchasing assets and holding onto them for an extended period, regardless of short-term market fluctuations. Exploring the benefits of this method can help investors make informed selections and build a disciplined investment mindset to achieve their financial goals. The goal of this study was to empirically evaluate the merits of a purchase and hold strategy in financial markets because of its perceived considerable influence on active market players. A Sharpe ratio was utilized for six financial markets from June 13, 2018, to June 13, 2023. The findings revealed that market participants can achieve a sustainable return by simply maintaining a long-term view of their portfolios. This was evident in the Nasdaq, CAC 40 and Nikkei 225. Upon selecting a particular risk tolerance and investment horizon, market participants may earn significant returns on their portfolios.

Downloads

Download data is not yet available.

References

Buzzacchi, L., & Ghezzi, L. (2023). Mean Reversion Lessens Mean Blur: Evidence from the S&P Composite Index. International Journal of Financial Studies, 11(1), 22. DOI: https://doi.org/10.3390/ijfs11010022

Camilleri, S.J., and R. Farrugia, 2018, The Risk-Adjusted Performance of Alternative Investment Funds and UCITS: A Comparative Analysis. International Journal of Economics and Finance, 10(7), 23-37. DOI: https://doi.org/10.5539/ijef.v10n7p23

Enow, S. T. (2023). Forecasting volatility in international financial markets. International Journal of Research in Business and Social Science, 12(2),197-203. DOI: https://doi.org/10.20525/ijrbs.v12i2.2338

Enow, S.T. (2022). Modelling Stock Market Prices Using the Open, High and Closes Prices. Evidence from International Financial Markets. International Journal of Business and Economic Sciences Applied Research, 15(3), 52-59. DOI: https://doi.org/10.25103/ijbesar.153.04

Enow, S.T. (2023). A Non-linear Dependency Test for Market Efficiency: Evidence from International Stock Markets. Journal of Economics and Financial Analysis, 7(1), 1-12. DOI: https://doi.org/10.32479/ijefi.13752

Fama, E. (1965). The Behavior of Stock Market Prices. Journal of Business, 38, 34–105. DOI: https://doi.org/10.1086/294743

Gründl, H., Dong, M. & Gal, J. (2016). The evolution of insurer portfolio investment strategies for long-term investing. OECD Journal: Financial Market Trends, 1, 1-57. DOI: https://doi.org/10.1787/fmt-2016-5jln3rh7qf46

Hatmanu, M., & Cautisanu, C. (2021). The Impact of COVID-19 Pandemic on Stock Market: Evidence from Romania. International journal of environmental research and public health, 18(17), 9315. DOI: https://doi.org/10.3390/ijerph18179315

Hui, E.C.M., & Yam, S.C.P. (2014). Can we beat the “buy-and-hold” strategy? Analysis on European and American securitized real estate indices. International Journal of Strategic property management, 18(1), 28–37. DOI: https://doi.org/10.3846/1648715X.2013.862190

Kozak, S. (2017). Degree of convergence of the efficiency of the Polish equity investment funds obtained with measures based on the Sharpe ratio, Financial Internet Quarterly, 13(3), 33-42. DOI: https://doi.org/10.1515/fiqf-2016-0028

Lo, A.W. & Remorov, A., (2017). Stop-loss strategies with serial correlation, regime switching, and transaction costs. Journal of Financial Markets, 34, 1-15. DOI: https://doi.org/10.1016/j.finmar.2017.02.003

Sanderson, R., & Lumpkin-Sowers, N. (2018). Buy and Hold in the New Age of Stock Market Volatility: A Story about ETFs. International Journal of Financial Studies, 6(3), 79. DOI: https://doi.org/10.3390/ijfs6030079

Siegel, J.J. (2002). Stocks for the Long Run. Third Edition. New York: McGraw-Hill.

Teimoori-Boghsani, M. A., Abdolbaghi Ataabadi, A., & Ameri, M. (2023). Effectiveness of Stop-Loss Trading Strategy VS Buy-And-Hold Strategy. Iranian Journal of Accounting, Auditing and Finance, 7(2), 39-60.

Weixiang, S., Qamruzzaman, M., Rui, W., & Kler, R. (2022). An empirical assessment of financial literacy and behavioral biases on investment decision: Fresh evidence from small investor perception. Frontiers in psychology, 13, 977444. DOI: https://doi.org/10.3389/fpsyg.2022.977444

Zaznov, I., Kunkel, J., Dufour, A & Badii, A. (2022). Predicting Stock Price Changes Based on the Limit Order Book: A Survey. Mathematics, 10, 1234. DOI: https://doi.org/10.3390/math10081234

Downloads

Published

2024-06-11

How to Cite

Enow, S. T. (2024). Investing in the long-term: an empirical approach. International Journal of Research in Business and Social Science (2147- 4478), 13(4), 537–541. https://doi.org/10.20525/ijrbs.v13i4.3276

Issue

Section

Related Topics in Social Science