If an individual has elected to follow a buy and hold investment strategy, on what conditions should they consider selling their investments, other than in order to rebalance or spend the money (for example to purchase property, or similar, if the investments were made with such a purpose in mind)? The strategy is by definition designed to involve holding the investments, and the individual is not advised to sell (or purchase) in response to trends in the market, so on what conditions would one be advised to sell under such a strategy?
"Buy and hold" doesn't have an exact definition, as far as I know. In my opinion, it's offered as a contrast to those who trade too frequently, or panic every time the market drops 2%.
For the general market, e.g. your S&P index holdings. You sell to rebalance to your desired asset allocation. As a personal example, at 50, I was full up invested, 95%+ in stocks. When my wife and I were retired (i.e. let go from company, but with no need to go back to work) I started shifting to get to a more sane allocation, 80/20. The ideal mix may be closer to 60/40.
Also, there are times the market as a whole is overvalued as measure by P/E and/or CAPE, made popular by Nobel Prize winning Robert Shiller. During these times, an allocation shift might make sense.
For the individual stocks, you had best have a strategy when you buy. Why did you buy XYZ? Because they had promise, decent company with a good outlook for their product? Now that they are up 300%, can they keep gaining share or expand their market? Sometimes you can keep raising the bar, and keep a company long term, really long. Other times, the reason you bought no longer applies, they are at or above the valuation you hoped to achieve.
Note - I noticed from another question, the OP is in the UK. I answer this my from US centric view, but it should still apply to OP in general. The question was not tagged UK when I replied.
Here's an easy test...
Look at the investments in your portfolio and ask yourself whether if you had the cash value, would you buy those same investments today, because effectively that is what you are doing when you continue to hold. If the answer is no, sell and pick something else.
Above all else, don't react to market swings, in most cases you are going to get it wrong and wind up losing more by making emotional decisions.
You talk about an individual not being advised to sell (or purchase) in response to trends in the market in such a buy and hold strategy. But think of this for a moment:
You buy stock ABC for $10 when both the market as a whole and stock ABC are near the bottom of a bear market as say part of a value buying strategy. You've now held stock ABC for a number of years and it is performing well hitting $50. There is all good news about stock ABC, profit increases year after year in double digits. Would you consider selling this stock just because it has increased 400%. It could start falling in a general market crash or it could keep going up to $100 or more.
Maybe a better strategy to sell ABC would be to place a trailing stop of say 20% on the highest price reached by the stock. So if ABC falls, say in a general market correction, by less than 20% off its high and then rebounds and goes higher - you keep it. If ABC however falls by more than 20% off its high you automatically sell it with your stop loss order.
You may give 20% back to the market if the market or the stock crashes, but if the stock continues going up you benefit from more upside in the price. Take AAPL as an example, if you bought AAPL in March 2009, after the GFC, for about $100, would you have sold it in December 2011 when it hit $400. If you did you would have left money on the table. If instead you placed a trailing stop loss on AAPL of 20% you would have been still in it when it hit its high of $702 in September 2012. You would have finally been stopped out in November 2012 for around the $560 mark, and made an extra $160 per share. And if your thinking, how about if I decided to sell AAPL at $700, well I don't think many would have picked $700 as the high in hindsight.
The main benefit of using stop losses is that it takes your emotions out of your trading, especially your exits.
If you are smart enough to use "hold" strategy, then you have deep information. Otherwise you are just another one who get "motley fool"-ed.
If you don't know who is the fool, then the fool is you.
There is no known way to apply "hold" strategy. W.Buffett told he did really wrong when he bought "not enough Apple". He sold everything too early.
If the way did exist even in slightest way, such guy as Warren would use it 100% to position his accurate sells.