As of 09/22/2021   Indus: 34,258 +338.48 +1.0%     Trans: 14,001 -67.19 -0.5%     Utils: 898 -0.44 0.0%     Nasdaq: 14,897 +150.45 +1.0%     S&P 500: 4,396 +41.45 +1.0% YTD  +11.9%    +11.9%    +3.9%    +15.6%    +17.0% Overview: 09/15/2021     35,600 or 33,800 by 10/01/2021   15,400 or 14,000 by 10/01/2021   930 or 890 by 10/01/2021   15,600 or 14,700 by 10/01/2021   4,650 or 4,350 by 10/01/2021 CPI (updated daily): on 9/22/21
 As of 09/22/2021   Indus: 34,258 +338.48 +1.0%     Trans: 14,001 -67.19 -0.5%     Utils: 898 -0.44 0.0%     Nasdaq: 14,897 +150.45 +1.0%     S&P 500: 4,396 +41.45 +1.0% YTD  +11.9%    +11.9%    +3.9%    +15.6%    +17.0% Overview: 09/15/2021     35,600 or 33,800 by 10/01/2021   15,400 or 14,000 by 10/01/2021   930 or 890 by 10/01/2021   15,600 or 14,700 by 10/01/2021   4,650 or 4,350 by 10/01/2021 CPI (updated daily): on 9/22/21

# Bulkowski on the Optimum Trading Hold Time

This article discusses how long you need to hold onto a stock to make a profit, based on the performance of a market index.

To make money, how long should you hold onto a stock? I'll give you the probabilities in a moment, but here's how I did it. I downloaded the daily, weekly, and monthly price data from yahoo finance using the S&P 500 index and then went to work. The data ranges from January 3, 1950 to April 13, 2010. For the computation, I used overlapping periods. For one year, as an example, I determined whether price closed higher from April 1, 2010 to May 1, 2009. Then I used the next month, March 1, 2010 to April 1, 2009, and so on. I summed the number of up closes compared to the number of samples and found the percentage.

In other words, I counted the number of times price closed higher for each period. The table below shows what I found.

 Period PercentageUp Closes Period PercentageUp Closes Daily 53% 5 Years 83% Weekly 56% 6 Years 86% Monthly 59% 7 Years 90% 1 Year 71% 8 Years 91% 2 Years 79% 9 Years 92% 3 Years 83% 10 Years 92% 4 Years 84%

For example, if you bought the S&P 500 index and sold it a day later, you would have a 53% chance of making money -- all else being equal. If you hold onto the index for a week, the probability of a gain rises to 56%. Hold for 5 years, and the probability rises to 83%.

If you are having problems making money in this market, then consider holding longer. Or just buy low and sell high.

-- Thomas Bulkowski

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