Buy and Hold Work?

Discussion in 'Trading' started by MingWu, Feb 14, 2007.

  1. MingWu


    anyone here use a trading strategy called buy and Hold?

    does it work in this market.. do you make money?

    do you think is it a good strategy?

  2. Of course it works... Until it doesn't work anymore.
    Everybody uses it, the only difference is how long the HOLD lasts...

    For me it is between 30 minutes and 2 days... For others it might be few seconds or minutes. For another category of people it can be few days

  3. August


    I think Buy and Hold has an undue reputation for being a conservative strategy.

    Buy and Hold can have huge drawdowns and depending on what you buy - you could sink entirely.

    If you bought Apple (AAPL) or Microsoft (MSFT) fifteen years ago, I'm sure you'd be sitting on thousands of percentages of gain. But what if you bought companies who went under or underperformed and missed those? So, fundamental analysis and market analysis would be key. Sometimes you just know something will do well. But then... that's what everyone thought about iomega. so, sometimes people just think they know. But buy and hold will keep you in it even if it's on it's way down.

    My point simply being that while it is definitely most people's strategy - it's not as conservative as people like to think. It's just lazy.

    I'm sure it's the companie's favorite strategy for it's investors. It makes stocks rise.
  4. Or you could have bought AAPL and MSFT just 7 months ago and made 50% :)

    Dont get stuck in the past

    buy and hold does work IF you are patient and buy GOOD stock
  5. August


    or... you could have bought Apple about 1 year go and lost 3% :)

    I agree though - Buy and Hold takes patience... my only point was that it definitely has as large drawdowns as many more liquid trading strategies.
  6. MingWu


    So buy & hold is not a good way to trade ???
  7. MingWu


    Which is the GOOD stock :D ?
  8. omcate


    If everyone just needs to buy and hold some good stocks, and becomes millionaires, who will work at the farms, restaurant, or supermarkets ? A lot of people will starve to death.

    Hundreds of thousands of mutual fund mangers in the past and at the present have employed the buy-and-hold strategy by picking the GOOD stocks. How come only ONE was able to beat the S & P 500 index for fifteen consecutive years ?

    How many people in 1999 thought that buy-and-hold was a good strategy? Probably over tens of millions. Had you been able to ask them the same question again, how many would have changed their mind now ?

    For every Warren Buffett, thousands of people may have lost their life long savings in the stock market. For every famous general, tens of thousands of soldiers may have sacrificed their lives.
  9. MingWu


    if everyone buy stocks and don't sell, we all will be millionaires..

    but you are right, we don't want everyone to be millioanire... only a few smart people.
  10. S2007S


    This market you can buy and hold,

    BUY SPY, DIA, QQQQ and hold, you cant lose money no matter what. Look at the last 50+ years, buy and hold. The dow in the next 10 years should be at 27000.
    #10     Feb 15, 2007