The Coca-Cola Company (KO), Microsoft Corporation (MSFT): Buy and Hold is Here to Stay

Page 1 of 2

After stumbling upon the 2009 book “Buy and Hold is Dead, I asked myself, “Did I fall asleep and wake up in a world without a stock market?” Let me tell you why.

The buy and hold strategy is the safest way to invest your money, because while you will likely experience downturns with certain stocks, you will also be invested when the shares launch into orbit. Take a look at investment guru Warren Buffetts’ Berkshire Hathaway. Buffett purchased The Coca-Cola Company (NYSE:KO) in 1988 when the stock was valued at around $2 per share. Shares then shot up to over $42 within 10 years, and it is just now returning to that high. Buffett’s investment of $1 billion in the company about 25 years ago has turned into $10 billion. He still owns the same shares he purchased in 1988. So while The Coca-Cola Company (NYSE:KO)’s price hasn’t realized the same highs it did 15 years ago, Coca-Cola is still a knock-out for Buffett and any investor savvy enough to get in on the stock at the right time. There’s no telling where the stock will go next, but a company as solid as Coca-Cola will likely realize more highs, and that’s why Buffett is holding on. The buy and hold strategy works when it is applied to companies that are solid — particularly when they pay steady dividends.

Coca-Cola Enterprises Inc (CCE)But what about that book?

Still, there are those who argue that buy and hold is dead. In fact, I suppose anyone taking the advice of the book Buy and Hold is Dead touts active investment management. That sounds like a lot of unnecessary work to me. After all, savvy investors know the company they buy, and they can tell after a thorough analysis which businesses will continue to profit far down the road. I’m not necessarily talking about 25 years, like Buffett with The Coca-Cola Company (NYSE:KO) – though that’s not a bad idea either. A minimum of five years is a fair timeline to give yourself with a buy-and-hold investment. While I can’t help but take a look at company news, particularly quarterly and annual reports, it’s also okay to ignore your investments and come back to them years later. Coca-Cola will still be here, for example.

What’s that you say, ignore my investments?

The frequency with which you check your investment should depend on the stock. Typically, large cap stocks in sectors with limited competition are better designed for this approach. The sector is very important, because if you used the buy-and-hold approach with Microsoft Corporation (NASDAQ:MSFT) and bought when the stock was priced near $60 per share in 1999, and held it to its current range of $29, you would be disappointed to say the least.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

The 10 Biggest Outlet Malls in USA

The 5 Most Popular Rap Songs of All Time

The 10 Countries that Eat the Most Meat

The10 Most Expensive Countries to Fly To

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!