Is Buy and Hold Dead?

[dtrader98]

Quote from cholmon:

Given that huge timeframe, I'd recommend scaling your chart logarithmically instead of linearly.

+1

You need to look at the proper perspective before making such assertions.
There are certain long periods that B&H did not do well, it is, however a wise adage over the very long run. When enough people are convinced it is dead, that's when a new bull will likely emerge.

1963-1981 BUY AND HOLD IS DEAD!
Warren Buffet is finished.

Or had you been around in the mid 70s, what conclusion would you have drawn from this similarly scaled chart?

"short and hold is more effective?"

 

[Kassz007]

Quote from dtrader98:

1963-1981 BUY AND HOLD IS DEAD!
Warren Buffet is finished.

Or had you been around in the mid 70s, what conclusion would you have drawn from this similarly scaled chart?


"short and hold is more effective?"

Indeed. Which is why I firmly believe that timing is just as important as direction.

 

[SomeYoungGuy]

Easy game.

 

[Misthos]

Two words:

SURVIVORSHIP BIAS

If you don't know what that is, look it up.

 

[psytrade]

buy n hold = betting on hindsight

 

[edbar]

Buying on dips and selling on on a run-up (on pullbacks) destroys buy & hold.

As dump as they are, mutual funds will survive though simply because there will always be enough people who say "I'm too busy, so I leave it to the experts to manage my money".

 

[SCI new york]

Quote from SomeYoungGuy:

Easy game.

You should know better. If it really were that easy, every american would be a billionaire and life would be different. Anyone can look at a chart stretched over a period and say "buy here, sell here and you're rich!!" Well OBVIOUSLY, but in retrospect, it hardly works out that way.

 

[increasenow]

real easy...signed Nasdaq 5,000 circa 2000...hope you bought leap puts back then

 

[Covertibility]

Interesting charts (source is on the top right of each graph):

Key lesson not shown here: The masses are not meant to get rich. Whenever the masses have discovered something they think will make them money, run. Otherwise if noone wants it, like gold back in 2000, BUY!!

 

[Father Branigan]

Buy and Hold may be OK for your retirement account, but at the very least you should hold divident-payers and sell upside calls against your positions to offset the down-turns.

For your active trading account, buy and hold makes no sense. My philosophy is that you need to protect yourself by getting into cash occasionally, especially if you incur a good streak of gains. After converting to cash, you can always re-evaluate the trading landscape and get back in.