Comments on: Is Buy and Hold Investing Dead or Just Misunderstood?

By: Derry Brown

Derry Brown — Sat, 20 Feb 2010 22:19:43 +0000

I agree but I don’t think Buy and Hold is dead. I don’t think that it was ever even alive.

Mutual funds are the ones that sold people on the concept of Buy and Hold because that is how they can collect the most fees. What is even scarier is that those promoting the Buy and Hold approach lead people to believe that an average annual returns of 8+% can be expected over the long term. This is such a half truth it is a lie.

Market history reveals that success through Buy and Hold occurs only when you are lucky enough to hold during a prolonged period when the market does well. There have been three periods longer than 57 years when the US market has achieved no real growth at all after inflation.

The Buy and Hold investor thinks that they can’t lose over the long term but not many realize that the long term on the US market historically has been up to 130 years!

Buy and Hold is the best option for most people, it is a much better option than not investing at all but for the diligent investor it is still far from the best option.

See how the numbers stack up here – http://etfhq.com/blog/2010/02/19/buy-and-hold/

By: Top 50 Buy and Hold Investing Blogs | ETF Database

Top 50 Buy and Hold Investing Blogs | ETF Database — Mon, 11 May 2009 22:49:15 +0000

[...] Think Your Way to Wealth explores the purported death of buy and hold and explains how it might be misunderstood. [...]

By: QuickHits: Company Stock Sale Edition | Prime Time Money

QuickHits: Company Stock Sale Edition | Prime Time Money — Sun, 10 May 2009 21:40:02 +0000

[...] Think Your Way to Wealth presents, Is Buy and Hold Dead or Just Misunderstood? [...]

By: RC

RC — Wed, 29 Apr 2009 02:46:30 +0000

@Jeff- Thanks, glad you enjoyed. When times are good buy and hold seems to work that way, but this recession shows that allocation and diversification can play a very important role.

By: RC

RC — Wed, 29 Apr 2009 02:44:49 +0000

@The Weakonomist- I agree- although recessions and down turns seem to scare people into timing the market at the wrong time.

@Dana- I think you are right- part of the problem is probably due to the fact that some people are too heavily weighted in the stock market, as opposed to being insafer investments when they may need the money.

By: Jeff@StretchyDollar

Jeff@StretchyDollar — Tue, 28 Apr 2009 15:14:58 +0000

This was a good read for me. I’d always thought of buy and hold as ‘buy it, put it in a safe place somewhere, and come back and check 40 years later.’ I’ve got some good stuff to think about now!

By: Dana

Dana — Tue, 28 Apr 2009 14:52:56 +0000

Buy and hold works in the long run. And most of the time, the market moves up. But when you’re caught in the trough during a cyclical period, and you need money, that’s not a good situation. The market isn’t for everyone. And it’s certainly not for people that need their money in a pinch. Looking at your financial obligations in the long run, and paying particular attention to when you plan to enter or exit the market should also impact the % you put into the market.

By: The Weakonomist

The Weakonomist — Tue, 28 Apr 2009 12:18:10 +0000

Buy and hold gets a beating in any recession. If anything, recessions should prove the point that you can’t beat the market and it’s best to ride the waves up and down.