Hold Outstanding Stocks Forever

Picture portraying the concept of holding outstanding stocks forever

"When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever."

Warren Buffett

I am constantly besieged by the questions wanting to know the best stocks for holding periods ranging from six months to an year, maximum. never is the investment horizon more than three years. And I have been advising aspiring investors about holding the investments intact for long periods, which is the norm for value-investors.

Here, Warren Buffett, Chairman of Berkshire Hathaway, is advising investors to hold shares of outstanding companies forever. Such companies not only reward investors with copious dividends for their lifetimes, but also generate immense wealth through capital appreciation or increase in the market value.

Does Warren Buffett Make Money on the Stock Market?

Picture Shows Electronic Display Board of the New York Stock Exchange

"I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years"

Warren Buffett

These beautiful words from Warren Buffett, Chairman, Berkshire Hathaway, are worth setting on stone are the guide post to aspiring value-investors.

Legendary investors do not invest in a hundred stocks with an objective of making a short/ medium term gain from the price the price rise. They make lifetime investment in best businesses like Gillette and Coca-Cola and simply forget the investments.

On the contrary ordinary mortals like me are tempted to sell the investments from the prise rise. Today, after a month I opened the online stock broking account to prepare for February 2017 investment, and found that our academic collection 'Portfolio 2K15' had appreciated 40% in less than two years. There is an irresistible temptation to liquidate the portfolio and en-cash the clear profit of Rs.200,000 on the cost of investment of Rs.480,000. 

Why should the portfolio be not liquidated? Why not make the significant profit and put the proceeds in a bank fixed deposit?

The answer is that this portfolio if  left untouched for the next 30 years and continue the self developed systematic investment plan (SIP) of Rs.10,000 every month, the portfolio could grow to the size of Rs.80 millions (Rs.8 Crores or US$ 1.20 millions).

Therefore, like Warren Buffett's Bershire Hathaway, budding value-investors everywhere should make investments considering that the stock markets are going to close tomorrow and remain closed for the next five or ten years - not to en-cash the handsome but in reality tiny gains made in two to three years.

Picture shows Warren Buffett and conceptualises his Inspirational Quotes