Among the many techniques involved with investments, buy and hold investing has become a popular choice for those looking outside the box. This strategy has some sound principles for long term investments, but it should be used as the ultimate solution for all investment needs.

For a person to buy and then hold an asset, he has to have other income avenues as he’s put all his cash on asset he can’t sell. If a person keeps on buying and holding, he’ll eventually end up with a lot of assets, but not a lot of cash. This can also lead to a hoarder’s mentality of saving anything and everything without any definitive purpose in mind. Over time, he’ll eventually have assets that are useless and aren’t even worth their purchase price.

Letting go of these assets at the right time is also tricky as this strategy doesn’t exactly tell you when to sell after holding items for long periods of time. An investor might unload his assets too soon, thereby foregoing potential profit later, or he might hold on to his investments for too long, skipping over the best window of opportunity.

A better strategy would be to research on different investment instruments, and understand how interest rates in the market work. This way, an investor won’t risk putting all his cash in an asset that won’t sell in the long run.