Buying Long

The term Buying Long refers to a situation that involves buying shares of stock with the assumption that the price and value of that stock will increase in the future, such as when an investor puts their money into an asset that they expect to make money over an extended period of time. This is the traditional way to buy and think about stock; you purchase part of the company at a certain price with the assumption or understanding that over time the company will be worth more money. Other assets such as commodities, currencies, and real estate can be Bought Long assuming that over time their value will increase, turning a profit for the investor. For example, if you were to buy a home at $50,000, hold it as rental property for five years, and then sell it for $250,000 once that area of town became more desirable to families, you would have not only obtained passive income on the property, but you would have been Buying Long on the assumption that the property’s value would go up in the future. It is important to note that, while many investors Buy Long under the impression that their investment will increase in value over time, this is not always true. For example, if you were to buy commercial property for $400,000 and then sell it for $250,000 two years later after failing to consistently rent or lease the property, you still would be considered to have Bought Long on the investment in spite of the negative return.