Buy and Hold SP500 Not A Good Idea Afterall....

Quote from LEAPup:

I'm a Broker and IAR. I agree with all of the above posters that buy and hold, is buy and mold.

As for doctors and lawyers, I only have one MD in my book of Clients. Most MD's want to trade their own accounts. Oh yes, the difference in an MD and God? God doesn't think he's an MD.

I've got two lawyers. Most of the others I meet are un-trusting kind of people, and also "manage" their own affairs. One lost $500,000 last year out of an $800,000 account he was "managing." lol!

You'll love this. I sat in on a meeting at my former Firm's request to explain to a group of ambulance chasing lawyers that if they are going to open an account with Etrade, they have to sign the arbitration agreement. EVERYONE who opens a brokerage acct. has to sign one of these. However, the "head" lawyer said "I think I can beat that requirement in court." I laughed, and got up from the meeting. I told him and the others I get paid to make people money. I don't have time for this "debate."

We weren't even going to be the firm they dealt with, but one of the "top" producers at my firm asked me to explain this to them so he can sell their referrals stuff from time to time.

So now you know how I feel about MD's and lawyers. They're not God even when they act like it.

I'd rather manage retirement $ for you guys, as at least you'd understand what we're doing... That's saying something!:D
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In my experiences, most lawyers and most DRs do not earn most of their money. They may earn 25% of their income but they take the rest. They would therefore have no respect for either their, or their brokers, hard work with respect to trading.

They only seek to get away with whatever they can as they feel they are entitled to a percentage of everyone else's money too.

I live in one of the most DR infested areas of Washington, DC and have a PhD in this.

Excellent post.
 
The problem is that the alternative is timing but then that's very very hard to do successfully.

Buy and hold, mixing your assets up is still the best of a bad bunch for most investors.

I would think that if you'd done that over a 10 year period, with ETFs, on 20 different markets, including stocks (including all the worlds markets), bonds, cash and property you wouldn't have done too badly.

But put yoru money in the S&P ETF and then yes, the results aren't that good.

Summary - Saying buy and hold doesn't work and then suggesting timing is better is of course 100% right, but impossible for the majority as they'll probably buy high and sell low.
 
The widespread belief that equity markets should, over the long term, return more than the risk-free rate needs to be shown up as the fallacy that it is. That would help immensely in helping the market bottom and restart the cycle.
 
Quote from Random.Capital:

The widespread belief that equity markets should, over the long term, return more than the risk-free rate needs to be shown up as the fallacy that it is. That would help immensely in helping the market bottom and restart the cycle.
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but if risk is inherent in equity markets it would be impossible for the return to be inferrior to risk free markets.
 
Quote from Random.Capital:

The widespread belief that equity markets should, over the long term, return more than the risk-free rate needs to be shown up as the fallacy that it is. That would help immensely in helping the market bottom and restart the cycle.
More...

The whole academic view of the markets needs to be shown up as the fallacy that it is.
 
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