How Long Should You Hold a Stock? | Angel One (2024)

Investing is not an easy game, and it requires a lot of patient minds, time and skillset. If one is willing to contribute time and is patient enough will reap unexpected rewards. Nowhere is it mentioned the timeframe of how long you should hold a stock? It depends on you. But ideally, it is said that you should not sell a stock that is doing good business and has a good market share.

Holding stocks for a longer duration will eventually give you profit only. And also, if you do not need urgent money, you should not sell a stock.

As said by legend, Warren Buffet-

If you cannot hold the stock you are buying today for 10 years, you should not buy that stock.

If you see the portfolio of every great investor in the world, their portfolio will have shares that they bought 10-20 years ago, and they continue to hold the particular stock even today. It would be great for you if you did not jump into the market to buy today and sell tomorrow. Wealth is not generated overnight, and it takes time.

In today’s era, where the expenses are unlimited, and the income is limited, everybody is searching for a means to generate income. They find the stock market an easy way, not knowing the hardships. There will be corrections. Generally, bull markets have a time frame of 2-4 years. The stocks you are buying today may hit the upper circuit only, or they may go down for the next three days consecutively; all you need to do is have trust and patience. It would be good if you had confidence in the company you are investing in.

It would help if you adequately studied the company’s line of business and saw its past performance. If you see any giant stock of any good company in a 10 years frame, you will see it has generated good returns in the long term.

Though there is no ideal time for holding stock, you should stay invested for at least 1-1.5 years.

If you see the stock price of your share booming, you will have the question of how long do you have to hold stock? Remember, if it is zooming today, what will be its price after ten years? You will see times when prices will go up and down because of some emotional factors; you should only focus on the company’s business. Never invest by taking tips, do your research always.

Like a flower takes time to bloom; similarly, a good stock takes some time to bloom and show its colours.

For example, Reliance share price in 2010 was only 576rs, its price is 2400, which is more than 400% profits. Suppose you invested 1lakh rs in reliance in 2010; it would be 4,16,000 today plus timely dividends. That is the result of long-term investing.

It would help if you kept in mind that big money is not made by selling the stock in 2-3 months but by holding it for long. The simple phenomenon you should know while investing in the stock market is that ‘patience is a virtue.

Suppose you see the share price of great companies like TCS, RELIANCE, MICROSOFT, BERKSHIRE HATHAWAY. In that case, you will know that these companies have given impeccable returns to their investors in a more extended period.

The stock market is unpredictable and very volatile. There are times when you will see your share prices daunting; know you should not panic at these times. You should also review your portfolio every three months to know which stocks are performing or not or is there any fundamental change in the company or you need to exit or not. Do not blindly keep the stock for a longer time frame; study the technical and fundamental parameters. There is no defined time of how long you can hold stock.

You have seen the once in a lifetime pandemic fall in nifty, which took nifty to 7500 levels. It recently touched 18500 levels, which is near 150%. In 1.5 years, nifty gave 150% returns, which is exceptional. So, the stock market will give good returns in the long run, but that does not mean every stock will zoom.

Do not let panic or emotional selling give dents on your portfolio. Every stock will give corrections, and how long you should stay depends on your trading style. If you trade in stocks seeing their fundamentals, you should stay for months and years. On the contrary, if you are a technical investor, you should study the charts and trade accordingly.

Do not let your emotions overpower your mind and then take control over decision making. Most of you know that wealth is generated over the years and not in months or days, and stocks need their own time to compound and grow to give you incredible returns.

HOW MUCH DO YOU KNOW ABOUT YOUR STOCKS?

Suppose you invested in a company that gives good healthy returns for months, and you continue to hold. One day it’s share price starts falling, and it is everywhere on the news that the business is not good, and people start panic selling. It would help if you had faith in the company and its business. Every business bumbles once in a while; if there is no significant fundamental change, it is wise that you stick to that share patiently, and eventually, it will give good returns. News is shown to create panic. When the same share starts giving good returns, the business suddenly becomes suitable for that company. It would help if you stayed invested. Patience is a virtue.

How Long Should You Hold a Stock? | Angel One (2024)

FAQs

How Long Should You Hold a Stock? | Angel One? ›

Though there is no ideal time for holding stock, you should stay invested for at least 1-1.5 years.

How long should you typically hold a stock? ›

For a holding period of less than one year, any gains will be taxed at a person's marginal income tax rate. By holding onto a stock for more than one year, an investor will likely lower their tax burden. It can be helpful for investors to speak with a certified tax professional before adopting any tax strategy.

How long can you hold a stock on Angel One pay later? ›

How long can I hold the stocks purchased via Pay Later (MTF)? You can hold your position under Pay Later (MTF) for a maximum of 90 days. Post 90 days, your position will be squared off based on script-wise ageing to the extent of the debit overdue by 90 days.

What is the average time someone holds a stock? ›

For whatever reason, people aren't holding stocks for as long as they used to. According to a new analysis from eToro, the average holding period for U.S. stocks was 10 months in 2022. This is down from more than five years in the mid-1970s. Those who have short holding periods are informally referred to as traders.

How do you hold stocks in Angel one? ›

In order to begin trading, you will require Demat and trading account, both available with leading stockbrokers like Angel One A Demat account will act know trading terms like buy, sell, IPO, portfolio,as the common repository that allows you to store the shares you have purchased, whereas a trading account will ...

What is the 3-5-7 rule in trading? ›

A risk management principle known as the “3-5-7” rule in trading advises diversifying one's financial holdings to reduce risk. The 3% rule states that you should never risk more than 3% of your whole trading capital on a single deal.

How long to hold stock to avoid tax? ›

If you hold a stock for one year or longer, your gain will be taxed at the long-term capital gains tax rate. But if you hold a stock for less than one year before selling it, your gain will typically be taxed at your ordinary income tax rate.

Is it good to hold stocks for long-term? ›

More Cost-Effective. One of the main benefits of a long-term investment approach is money. Keeping your stocks in your portfolio longer is more cost-effective than regular buying and selling because the longer you hold your investments, the fewer fees you have to pay. But how much does this all cost?

Why not to hold stocks overnight? ›

A day trader often closes all trades before the end of the trading day, so as not to hold open positions overnight. It is rare that an overnight position can transform a daytime loss into a profit and, additionally, there is a risk with keeping an open position overnight.

When should I sell my stock? ›

It may make sense to sell the stock as soon as the technical level is breached on the downside. If a stock breaks through a key resistance level on the upside, it may signal more gains and a higher trading range for the stock, which means it's advisable to sell part of the position rather than all of it.

What is a good number of stocks to hold? ›

“Most research suggests the right number of stocks to hold in a diversified portfolio is 25 to 30 companies,” adds Jonathan Thomas, private wealth advisor at LVW Advisors.

How long does the average trader hold a stock? ›

Pattern traders typically hold their positions over a few days up to several weeks. On the other hand, day traders close their positions within the same trading day. Based on the frequency of transactions, day traders would pay closer attention to the financial markets during trading hours.

How long should stock be kept? ›

Chicken stock likely goes bad the fastest of any ingredient in the dish. You have 3–4 days in the fridge after it's made before bacteria finds that tasty stock. In the freezer there is no cellular activity, just a little sublimation, so you can do that for like three months.

How long should I hold a stock for? ›

If your stock gains more than 20% from the ideal buy point within three weeks of a proper breakout, hold it for at least eight weeks. (The week of the breakout counts as week 1.) If a stock has the power to jump more than 20% so quickly out of a proper chart pattern, it could have what it takes to become a huge winner.

Why am I not able to sell my shares in Angel Broking? ›

It appears to be a technical issue requiring further investigation. Please create a support ticket detailing the problem encountered. Kindly provide your client ID via private message for assistance. Additionally, attaching a screenshot would aid in expediting the resolution process.

What is the minimum holding period? ›

Meeting the minimum holding period is the primary requirement for dividends to be designated as qualified. For common stock, the holding must exceed 60 days throughout the 120-day period, which begins 60 days before the ex-dividend date.

Is it good to hold stock for 5 years? ›

It all depends on your investment strategies and the further plans that you are keeping in your mind. However, as far as the discussion with the experts and multinational investors goes, they say that a long-term investment for a fundamental trader can prove to be more beneficial and advantageous.

What is the 8 week hold rule? ›

If your stock gains over 20% from the ideal buy point within 3 weeks of a proper breakout, hold it for at least 8 weeks. (The week of the breakout counts as Week No. 1.)

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