Investments
Enero 14, 2022 - < 1 min

Goodbye, long-term stock market investments

The period in which investors hold their stock investments on the New York Stock Exchange has been falling steadily for several decades.

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One of the mantras of Warren Buffet, the world's most famous investor, is to invest for the long term. "Our favorite investment period is forever," goes one of his famous quotes. But the world seems to see it differently. According to an analysis by Visualcapitalist, long-term investments in stocks are in steep decline. The period investors hold their stock investments on the New York Stock Exchange has been falling steadily for several decades, but reached a new low in 2020, averaging just 5.5 months, down from 8 years in the 1950s.

What are the forces behind this reality? There are several, according to Visualcapitalist: the emergence of high-frequency automated trading systems, lower fees and commissions in equity trading, a greater focus on short-term results, and the shortening of the life cycle of companies. What will be the limit?