Which best describes a buy and hold strategy according to Perold Sharpe analysis?

A buy and hold strategy, according to Perold Sharpe analysis, is best characterized as a passive strategy of buying and not adjusting afterwards. This approach involves purchasing securities and maintaining ownership over a long time frame, regardless of interim fluctuations in market prices. The underlying philosophy is based on the belief that, while markets may experience short-term volatility, they are likely to increase in value over the long term.

This method reflects an investment philosophy that prioritizes long-term growth and minimizes transaction costs associated with frequent trading. As such, it does not involve ongoing trading or requiring constant market evaluation, which distinguishes it from more active management strategies. The buy and hold approach is aligned with the idea of capitalizing on the general upward trajectory of equity markets over time, making it a foundational concept in investment strategy discussions.