Audio Length: 00:19:05

Buy and hold investing is one of the toughest types of investing to do because it calls for you to go against human nature for the instant big payout. After all, why do we play the lottery? We love the idea of becoming a millionaire overnight.

Buy and hold investing is slow and slogging. The payout may not come for several decades. Who has the guts to stick it out that long?

But for those investors who do have the guts, buy and hold investing can pay off with big returns.

3 Strategies for Buy and Hold Investing

1.    Start Young. The longer you have to invest, the more you’ll reap the rewards of compounding.

2.   Diversify. Don’t just buy one stock or even two. What if one of them is a Bear Stearns or a Wachovia? Spread out your risk.

3.   Don’t Get Fancy. You don’t need the latest fad stock or biotech wonder. Stick with the basics. Buy companies that have solid fundamentals and strong brands.

Stocks to Buy for a Buy and Hold Portfolio Today

1.      Diageo PLC (DEO - Free Report) isn’t technically a value stock. It has a forward P/E of 20. But it’s expected to grow earnings by 18% in fiscal 2018. The maker of Guinness, Baileys and Johnnie Walker also pays a dividend currently yielding a healthy 2.6%.

2.     Mylan N.V. (MYL - Free Report) is dirt cheap. This drug company trades with a forward P/E of just 7.8. It also has earnings growth which is expected to be 17.1% in 2018.

3.     Sony (SNE - Free Report) is big in entertainment but is also moving into the self-driving car market as it’s working on the sensors. It’s a value stock, with a forward P/E of 13.1. Sony also pays a dividend, currently yielding 0.3%.

4.     AbbVie (ABBV - Free Report) is a rare growth and value stock. This biopharmaceutical has a forward P/E of 15.4 yet is expected to grow earnings by 33.9% in 2018. As an extra bonus, shareholders also get a dividend yielding 2.5%.

5.     Walgreens Boots (WBA - Free Report) has pulled back off its highs so it’s cheaper than in January 2018. It trades with a forward P/E of 12.2. It’s closing on the Rite Aid deal in 2018 which will add another 1600 stores. Earnings are expected to rise 13.5% in fiscal 2018.