Published by MBA Skool Team, Last Updated: August 05, 2015
What is Holding Power?
Holding Power refers to the ability to hold onto an investment without selling, and can have immense impact on the outcome of one’s investments. Greater holding power allows investors to tide over temporary setbacks in the market and wait for the market forces to turn back in favor of the investor. It allows for decisions to be made based more on sound analysis than reactive emotions.
For example, if you've invested in a share using money set aside for your car loan repayment due in a month versus when you’re invested in a share using your disposable income, you have more holding power in the second scenario since if the price of the stock were to drop in the next one month, you would not be able to hold on to the stocks and wait for the market to go up again as your car loan repayment would be due. You would be in extra pressure to quickly sell off the stock.
While Holding Power does not guarantee profits will definitely be made from our investments, it does give people a little leeway in waiting for market conditions to become favourable for them.
An alternate definition of Holding Power is the ability of a radio, television program, channel or website to keep its audience from switching the channel or station, and if often expressed as the percentage of total audience.
Hence, this concludes the definition of Holding Power along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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