What is the "Hold for Five Years" investment principle?

Buy bargains and hold for years.

Hold for Five Years - John Templeton

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I never ask if the market is going to go up or down because I don't know. I buy bargains and hold for an average of five years.
— Templeton's Way with Money，2012

🏠 Everyday Analogy

Long-term investing is like planting trees. Early progress looks slow, but compounding happens underground before it becomes visible.

📖 Core Interpretation

John Templeton frames investing as a compounding game. Time amplifies quality and discipline, while unnecessary activity often destroys long-horizon returns.

💎 Key Insight：Long holding periods let value materialize.

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❓ Why It Matters

Short-term noise often forces investors out before value is realized. Long-term discipline increases the odds that fundamentals, not emotions, drive outcomes.

🎯 How to Practice

Extend research and review horizon, reduce unnecessary turnover, and adjust only when intrinsic value, risk, or opportunity cost materially changes.

⚠️ Common Pitfalls

✕Calling it long term while never reviewing thesis

✕Overtrading and damaging compounding

✕Ignoring opportunity cost and alternatives

📚 Case Studies

Buying at Outbreak of WWII (1939)

Templeton borrowed money to buy 100 shares each of 104 depressed U.S. stocks under $1 as war began in Europe, based on research that pessimism was extreme and many firms were still fundamentally viable.

✨ Outcome：Within a few years most positions recovered or prospered, turning a small, risky purchase basket into a strong multi‑bagger and forming the basis of his contrarian, research‑driven reputation.

Early Investment in Post‑War Japan (1954)

Through on‑the‑ground research and analysis of balance sheets, Templeton invested in neglected Japanese companies during the 1950s, when the country was still rebuilding and foreign capital was scarce and skeptical.

✨ Outcome：As Japan industrialized and exports boomed, these unloved stocks multiplied in value, helping Templeton’s funds significantly outperform global benchmarks over the following decades.

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