Buy & Hold Under Fire

“Buy and hold.” “The market is resilient.” “Don’t worry about it, call me in 20 years.” Sound familiar? I don’t agree with philosophy anymore. If you started investing in stocks in 1998, you’ve hardly made any money if you abided by this principal. If you managed your downside risk and sold into gains, you probably did well. But the only stock investors that have done well in the past 10 years are day traders and speculators. This proves buy and hold doesn’t work. I firmly believe that you should move your investmets around as the economy changes and diversify among investment choices. I think money should be added to the stock market only when it’s on a bull run, otherwise it doesn’t perform any better than risk free investments. Why do “financial experts” stand firmly by the buy and hold philosophy? Because they make fees and those fees amount to billions of dollars for companies that manage mutual funds. If you take you’re money out, they don’t make fees, plain and simple. Now that you know the secret, you won’t be fooled again. If you don’t play by their rules, you’ll be running the show soon enough.