The Concept of Long-Term Investing and Its Risks

     There is no strict definition for the duration of long-term investing. Generally, holding a stock for over a year is considered long-term, with some investors holding for years or even decades. Long-term investing is primarily based on value analysis rather than technical analysis and suits investors with sustained capital availability. The key lies in selecting listed companies, whether growth-oriented or value-oriented. Typically, investment opportunities arise during economic cycle troughs, while entry during late-cycle booms should be avoided.
   

       Value-based long-term investing is not without risks. Its primary risks include time risk and concentration risk, and its risk profile is not necessarily lower than that of technical analysis-driven trading strategies. Long-term investors often hold a concentrated portfolio of a few stocks, exposing them to risks tied to those specific companies. If a company’s future performance diverges from growth expectations, risks are concentrated and amplified. In this sense, value investing carries concentrated risks, while trading strategies offer risk dispersion.

       Warren Buffett, the iconic figure of value investing, once remarked: "Value investing does not guarantee profits, as investors must not only buy at a reasonable price but also ensure the company’s future performance aligns with expectations."