Which of the following best describes the "buy-and-hold" investment strategy?

The "buy-and-hold" investment strategy is characterized by purchasing assets with the intention of holding them for an extended period, often many years, regardless of market fluctuations. This approach is based on the belief that, over the long term, the value of investments will increase, allowing the investor to benefit from capital appreciation rather than attempting to time the market through frequent trading.

Long-term holding can provide several advantages, such as minimizing transaction costs, reducing the impact of market volatility, and benefiting from compound growth over time. This strategy is often favored by investors who prioritize stability and growth over short-term gains, aligning perfectly with the definition provided in the correct answer.

Understanding that this approach contrasts with active trading strategies or market timing can reinforce the rationale behind the buy-and-hold tactic, making it a foundational concept for many investment philosophies.