Buy and hold is BULLS_iT. That is true however the concept of Buy Low and Sell High is always the art of any true Investor. A trader is directed to trade. An investor can buy but the art of selling for profits is held by only a few. The sell side of investing or trading is what separates the pro from the novice. Whether a short or a long its all the same. Sell High Buy Low or Buy Low Sell High.... HOLD is no where in there. If you have upside momentum with consistent growth then why not. The old wall street adage is: Pigs get slaughtered. Most people for example bought BAC last week between 4.07-5 it went above six which would be a 50% move in the stock and how many did not take anything off? Many. SO you are 50% right Buy HOLD is Bull. Nothing is wrong with taking a portion of profit. Buy and sell at a profit. If you hold make sure you have a dividend to keep you happy. Please send me a link to your video... Is it me or would it be easier for the Govt to take over the credit rating companies from Experian to Moodies than the banks. If we allowed more qualified people to buy these assets wouldnt that fix the crisis. how about a 0% loan mortgage for 5 years with a 4% rate in five years and a 6% cap in 10 years. The 4-5-6 proposal. The banks need to become real estate companies and rent these homes out to Section 8 and other govt programs like the homeless/ nursing homes. Veteran Assistanting etc. Problem solved. No TARP just some good old fashioned WORK on behalf of the fat asses that work in the Govt. There are enough people in the projects getting section 8 to supplement the payments on these loans at least for the next 3 years. Let them do some work at least packing boxes to move. GM / F/ Chrysler/and even BAC needs to have their workers stop working in the plant and put them on commission and have them go out and sell company stock on the phone. Problem solved.
Buy and Hold is not a lie, it depends on when you had bought and had held that matters. To get an idea of this, take a long term chart of the markets, say from the 1800's and run a trend line. Today we're about 40% below that trend where in such previous instances it has been a good point to start picking away at things. Buy below the trend, sell above it. Also the Great Depression really wasn't that bad for investors. IBM and AT&T are 2 examples of companies who had stable dividends during that time period.
If you buy and hold and thus have no defined exit strategy, you better make sure your entry strategy is the best as they can get
Seems to me that buy and hold does work, otherwise geniuses like Warren Buffett would not exist, but you need to know what the hell you're doing. Mutual funds spread their investments as much as possible to avoid risk as much as possible. This tells me that these guys know risk and how to avoid it, but not if they really know what to buy and hold, hoping to be profitable. Buffett has always warned about diversifying your portfolio too much, since it's proof of incompetence. Keep it simple, small and only buy companies you know. Anyway, the OP is right about the fact that most, if not all Mutual funds are run by idiots that avoid risk as much as possible and use their "passively" managed result for next years advertising campaign, hoping to hook some more punters. But like any Ponzie scheme, such business models only works well when the markets go up. When it's down and all is running to the exit, funds are hit the hardest. Moving 1 trillion dollars out of the market is simply not doable without sustaining major losses. Thus, anyone stupid enough putting their hard earned coins in the hand of these funds, will suffer the brunt of the declining market. Also, these funds are used as hedges by the bank keeping them afloat, while pushing average Joe and his 401k under water. Such bank products are the moat around the castle, simply put. My advise would be to do it yourself, on your own time and money. If you're willing to fork it over to some Fund, where some nose picking clown is analyzing how he will spend his next years bonus on your expense, you probably don't deserve the money you're willing to invest to start with. A fool and his money are soon parted!
Buy and hold does NOT mean: (a) buying blindly (b) buying the index (c) holding forever (d) holding and ignoring bad news or technicals Buy and hold is value investing based primarily on fundamental analysis but does NOT preclude technical analysis. The holding period is determined by both fundamentals and technicals. If you bought MSFT in the early 1980s and sold late 1990s for whatever reason, that is buy and hold for that period and you made a fortune. Ron
How about a 30 year time horizan for you? If you had bought the S&P500 at the peak in 1964 it was an inflation adjusted 3100, by 1982 it had fallen to around 800, and it wasnt until the mid 90's that you got back to breakeven. That's a pretty LONG TERM time horizan to be losing money over.
Seriously, most folk pic stocks like ice cream. If they like the pretty picture on the box, they buy it. Brandon's right. Buy & Hold isn't how Joe Six-Pack is gonna retire. To say Joe's got no business buying stock is like saying Illegal Aliens have no business crossing our borders. It might be true, but no one's stopping either one.
Depends what you buy and hold. If you bought Berkshire Hathaway for $50 in 1974 you would be pretty glad that you had not listened to the 1970's version of Brandonf