Of course,
buy and hold investors receive the same dividends, so we have not included a dividend in the example above.
Not exact matches
The table below shows the max gains
and drawdowns
buy and hold investors would have
received over each of the previous eleven decades.
By
buying and holding bonds until maturity,
investors can also
buy bonds with coupon payments
and maturities that meet specific income needs, as they know exactly how much they are going to
receive over the life of the bond.
If you
buy a bond
and hold onto it until it matures, which many
investors do, rising rates won't have any effect on the income you
receive.
There is a profound difference between the returns that a
buy -
and -
hold investor receives,
and that which the average
investor receives.
In short, though the academic studies rely on time - weighted rates of return for their conclusions regarding the equity premium, which represents
buy -
and -
hold investors, dollar - weighted returns, which is what most
investors actually
receive on their investments, are lower.
Unfortunately, the equity market returns less than a
buy -
and -
hold investor receives, because people
buy and sell at the wrong times.
To add to their distress, many
buy -
and -
hold investors did not even
receive the market return.
These accounts would allow
investors holding US - dollar assets in their RRSP accounts to avoid currency conversion fees when
buying and selling (for brokers that don't allow «wash trading»)
and to keep the dividend
received from US - listed
holdings in US dollars.
A strategy for investing in which
investors buy a bond
and hold the bond until the date of maturity when the
investor receives principal back
and interest, if any.
It talks about an issue I have been writing about for a long time — the difference between what a
buy -
and -
hold investor receives and what the average
investor receives.
The
investor who has
bought and held since 1989 has
received 10 % extra compared to Canada's (125 bps spread for eight years)
and a capital appreciation due to the spread narrowing of about 1 % for a total excess return of 11.25 %.