One of the most common meanings of the term “hold” is the financial hold implemented in some institutions, especially schools and universities. If the student has availed of a student loan or needs to settle some financial obligations by a certain date but has failed to do so, the institution may impose certain restrictions on the student, depending on its set policy.
On the other hand, in the context of finance and investment, holding may be the act of waiting for the right time to act, instead of purchasing or selling securities. This is usually a recommendation made by investment analysts depending on the performance of a specific security during a given time.
On the other hand, to hold a security also means to refrain from selling it. This is the second part of a strategy known as “buy-and-hold.” This strategy, as the name suggests, involves purchasing a security. The second action is holding on to the said security for a relatively long period of time.
It is highly possible that dips will be encountered during this period, but the idea is to hold on to the security despite these short-term fluctuations. By keeping the security over a long period of time, possibly ten years or more, the investor is relying on the idea that the value of the asset will appreciate eventually.
While some investors prefer to buy and hold securities, others who are not willing to rely on long-term gains may engage in day trading instead. This requires the investor to determine when a security will peak and capitalize on it. The investor should also be able to determine when a security is at a low point and buy at that point.