How Long Do You Typically Hold A Stock For?

Every week, Benzinga conducts a survey to collect data on investing trends, such as what traders look for in a stock and how they get their trading funds.

This week, we asked the following question to over 500 traders and investors concerning their trading timeframe: How long do you typically hold a stock for?

• Less than 1 day
• 1 day to 1 week
• Monthly
• Yearly

The top response was yearly, with 29% of respondents indicating that this was their preferred trading timeframe.

When evaluating your trading timeframe, it is important to take into account things such as your income and target retirement age. While market volatility can make some traders shy away from holding stocks long-term, if you aren’t looking to retire within five years this is usually the best bet.

The second-highest scoring response was one day to one week, with 27% of respondents preferring this timeframe. 

By trading on this timeline, investors take advantage of market swings but don't have to by their computer all day. If you have under $25,000, using this timeframe can allow you to be active in the market without violating the pattern day trader rule.

The next-highest scoring response was monthly, with 26% of respondents opting for this timeframe. 

Many swing traders opt to hold stocks for a few months, hoping to profit from short- to medium-term trends. Employing this strategy allows investors to take a more hands-off approach, but also exposes them to overnight and weekend risk.

Finally, 18% of respondents indicated that they prefer to hold stocks for less than one day.

These types of traders are known as day traders, as they look to take advantage of hourly or even minute-by-minute changes in the market. In order to make more than four or more day trades within a five-day period, you need at least $25,000 in your brokerage account. Day trading can be extremely risky, so it is crucial to manage your risk by using stop-loss orders and other tools.

Henry Khederian contributed to this report.

Photo by MayoFi on Unsplash.