permanentholds

A permanent hold is a financial strategy employed by investment firms and asset managers to retain ownership of certain assets indefinitely. This differs from typical investment strategies where assets are bought and sold based on market conditions or predetermined exit strategies. Permanent holds are often utilized for assets deemed to have long-term, stable value and income-generating potential, such as real estate, infrastructure, or mature operating businesses. The decision to implement a permanent hold is typically based on a belief that the asset's intrinsic value will appreciate over a very extended period, or that its consistent cash flow generation is more beneficial to retain than to liquidate.

This strategy requires significant capital and a long-term outlook. It allows the holder to benefit from compounding returns, dividend income, or rental income without the transaction costs and market timing risks associated with frequent trading. Permanent holds can also be advantageous for tax purposes, deferring capital gains taxes indefinitely. However, it also means the capital is locked up and cannot be easily redeployed into other opportunities. The success of a permanent hold strategy hinges on the accurate assessment of an asset's enduring value and the ability to manage it effectively over many years, potentially generations. This approach is more common in institutional investing and for family offices managing generational wealth.