Is Buy and Hold Dead?

I'm no expert, but is the age old "buy and hold" still good policy? Certainly it has worked in the past. Below is a monthly chart of the S&P going back 40 years.


Click for full size - Uploaded with plasq's Skitch

As you can see, buy and hold certainly worked for a large chunk of the time. Especially for those who started putting away back in the 60's, 70's and 80's, otherwise known as the baby boomers. Maybe the same people who are responsible for promoting the "buy and hold" strategy.

Sure it worked for them. But will the same thing work for us younger folk? It looks like buy and hold stopped working around 1997. Is there a possibility that the current generations will have to be more nimble with their finances, or at least more financially savvy than the baby boomer generation?

Could we say that the uptrend from 1969-1997 was due in most part to America's booming economic growth? And if so, can we expect that same growth in the coming decades?

Something that has been on my mind.

 

Given that huge timeframe, I'd recommend scaling your chart logarithmically instead of linearly.

 

1) Yes.....mostly.......it depends. It tends to work "best" from the middle of a decade to the end of a decade. Try to side-step the beginning of the decade.
2) Yes
3) The "growth" during that time had more to do with asset inflation, not industrial capacity.
4) Can you wait for the next "Roaring Twenties" or "Nifty Fifties"?

 

Yea i have been holding citi bank lehman bro merril lynch ops i mean bank of america
BUY AND HOLD IS FOR SUCKERS

 

Meanwhile buy-and-holders receive dividends.

 

....when the dividend isn't suspended nor eliminated.

 

What buy and hold. nowadays no one is even in the market

 

short and hold is more effective.

 

buy and hold was pronounced dead in early 2009. what happened then. you had the biggest straight up 60% move in history.

http://www.4morewealth.com.au/pdfs/InvestorEmotionsRollerCoasterCartoon.pdf

 

I autopsied it in 2000.