Is long-term investing a steady but winning investment strategy?

When you think of long-term investing, many famous names associated with successful investing come to mind, such as Warren Buffett, Charlie Munger, John Maynard Keynes, Atsuto Sawagami, Hideto Fujino, and many others.

But even with long-term investing, it is quite difficult to determine how long you must hold for it to be considered long-term.

Warren Buffett is famous for not letting go of a stock once he buys it, but in reality he does engage in a fair amount of buying and selling.

It seems that the standard for long-term investing may not be about time.

If you take Warren Buffett's words as a reference, there is a saying: “If you do not have the willingness to hold a stock for ten years, you should not even consider holding it for ten minutes.” In other words, long-term investing means considering the intrinsic value of the company and choosing stocks with the intention of holding them for a long period.

However, as time passes, there may be times when you decide the company is not as you expected and sell.

It is a rather difficult feeling, but perhaps long-term investing is not simply about holding for a long period; it may be about finding companies you want to hold for the long term based on their intrinsic value.

Purchase cost for long-term investors: the 200-day moving average

(From SBI Securities)

Long-term investors sometimes refer to the 200-day moving average to gauge purchase cost.

As you can see at a glance, the Nikkei Average has stayed above the 200-day moving average for the past year. In other words, if you regard the 200-day moving average as the average purchase cost for long-term investors, then long-term investors have not incurred a loss even once over this past year.

In short, it is a simple investment strategy of buying good companies and holding them, but it turns out that long-term investing can be fairly easy to win with.