Can you beat buy&hold?

[Petsamo]

My strategy is intended to show that a trader can beat the buy and hold strategy.

I'm typically 100% long. When I detect a high probability downturn, I sell, then repurchase at a lower price. I call this reverse scalping.

Proof that I'm succeeding: In March 26, I possessed 1918 shares of EWZ. In May 21, I have the equivalent of 1946 shares of EWZ. (I actually own EWZ, RIMM, & MAC.) I could own more but I'm still new, and I try to be careful. I also manage my niece's account. I started her at 95 shares, now she's up to 107 shares. All this is done without adding new money.

So yes, I am beating the buy and hold strategy.

 

[joe4422]

Quote from Free Thinker:

those days are over.

No, those days aren't over. The problem is your only looking at charts. Again, investors don't look at charts. You have to look at true historical prices, splits, and dividends to know what a buy and holder really makes. But buy and hold doesn't mean a year, it needs to be an absolute minimum of 5 years.


What kind of return do you think some one who held TIF over the last 20 years would have made? The answer would surprise you.

 

[deaddog]

Yes buy and hold can be beaten easily.

Use margin to trade in and out of the price fluctuations.

Works especially well in a side ways market.

 

[TFer]

Quote from nfactorial:

Hello,

Can you beat buy&hold on a yearly basis?

By beating I mean improving returns, max DD, volatility and Sharpe with a minimal number of RT transactions (more than 4/year is a lot).

So, can you do it?
And if you can, please explain what kind of strategy you use (no details needed).

Thanks,

Long term timing with moving averages beats buy & hold more than 75% of the time according to this study.

http://easyretirementinvesting.com/2010/03/proof-that-long-term-market-timing-works/

 

[Ghost of Cutten]

For decades this was very easy. Just own the S&P except auto stocks. Now with GM gone, it's still easy - just own the S&P except financial and real estate companies.

 

[Free Thinker]

Quote from joe4422:

No, those days aren't over. The problem is your only looking at charts. Again, investors don't look at charts. You have to look at true historical prices, splits, and dividends to know what a buy and holder really makes. But buy and hold doesn't mean a year, it needs to be an absolute minimum of 5 years.


What kind of return do you think some one who held TIF over the last 20 years would have made? The answer would surprise you.

all you have to do is look at the performance of most buy and hold mutual funds. you will find that after 2008 most are still negitive over 7-10 years. they underperformed bank cd's. enough said.

 

[neutrino]

The "buy&hold" strategy is actually a fiction. What is important is how you compare to other people. And there are no people that use that strategy - are there really any people that actually bought the S&P500 or just the Dow 30 companies, added at regular intervals and held for 20 years? In reality they most probably added large sums at the top and subtracted what's left from the account at bottoms.

A more relevant question would be: Can a low-frequency trading/investing approach beat a high frequency trading and how exactly if possible?

My answer is yes - it is possible to beat both "buy&holders" and active traders but not by doing 4 trades per year. The only approach that seems to work is the one that's used by Warren Buffett. Proof - 50 billion dollars. For more information read one book about him and read ALL his letters to shareholders.

 

[crgarcia]

Quote from Free Thinker:

yes. buy the dips and sell the rips.

Buy-and-hold works wonders in trending markets.

In sideways markets, you spend a lot of time (10+ years) while stocks keep at the same level.
We are in a huge, sideways market since 1998.

 

[neutrino]

Quote from crgarcia:

Buy-and-hold works wonders in trending markets.

In sideways markets, you spend a lot of time (10+ years) while stocks keep at the same level.
We are in a huge, sideways market since 1998.

I am sure most "buy&holders" opened their positions in 1998 and exited in 2002. Then got back in 2007 and are now underwater and whining about high-frequency trading