Also called B&H, Benchmark

Buy and hold

Buying once and doing nothing. The benchmark every strategy must beat, measured over the identical window, because beating nothing is not a result.

Updated 2026-09-03

Buy and hold is the benchmark: what you would have made by buying the same instrument at the start of the test period and doing nothing at all. Every strategy result should be read against it.

It is the comparison people most want to avoid, because it is brutally hard to beat. Buy and hold has no transaction costs, no timing risk, no spread paid on every entry, and no requirement that you be right about anything except the direction of one long-term trend. A strategy that returns 40 percent over a period when the underlying returned 60 percent did not make money. It cost money and generated a great deal of activity.

There is one legitimate reason to accept a lower return than buy and hold: a materially smaller max drawdown. Getting most of the return with half the pain is a real result, and it is what calmar ratio is designed to measure. Anything else is a strategy losing to doing nothing.

See also

  • Backtest — Running a set of rules over history to see what they would have done. It shows what did happen, never what will, and it flatters any rule tuned on the same data.
  • Total return — What the account gained or lost across the whole test, start to finish.

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Educational content, not investment advice. Angie explains how a valuation is built so you can judge it yourself. What you do with that is your call.

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