Reviewed by Aug 26, 2020| Updated on
Introduction to Hold:
A 'hold' is generally an experts suggestion or recommendation to not either sell or purchase securities. A firm making a recommendation to hold is usually anticipated to perform with the market or at a similar pace of peer companies. This rating is considered to be better than sell and not better than purchase. This means that investors with existing long positions are not supposed to sell, but new investors with no position shouldn’t enter the market.
A 'hold' suggestion can be perceived as a thought to hold on to whatever you currently have and refrain from purchasing any more of that specific security. Hold recommendations are one of the three investment recommendations that can be made by qualified professional securities analysts. Any given stock will come with a sell, purchase, or hold recommendation. Sometimes, a stock may be having different recommendations given by various institutions. In these scenarios, the investors must analyse the reasons behind recommendations and choose that to follow that recommendation which they think is more accurate for them and can lead to profits in the future.
If investors think that a given stock is to be held, then they have two excellent options. If they already have shares of the particular stock, then they need to stay invested in the equity and wait to check its performance over a specific timeframe. If investors don't have any shares of the stock in their portfolio, then they should hold back from purchasing and wait to buy until its potential to offer good returns seems better and more apparent.
When is a hold recommendation made?
If an analyst recommends investors to hold a particular stock, then it means that he or she does not see it outperforming or underperforming its peers shortly. A given stock may have different recommendations and investors should decide to follow the one that they see as more accurate.