| Current Category is: Stocks & Mutual Funds | Select Another Category | |
|
|
| Home | Search | Categories | Links | About Us | Contact Us |
|
|
 |
Buy and Hold Investment Strategy
"Buy and hold" is one of the most heralded investment strategies promoted today. "Buy and hold" is also one of the few investment methods where you are guaranteed to lose money 2 out of every 5 years...so why do it? Before expanding on the questionable value of "buy and hold", it's probably best to take a deeper look into who's spending their millions of dollars of marketing money convincing you that "buy and hold" is the best idea and why. "Buy and Hold" Promoters "Buy and hold" promoters vary but I'm going to single out the mutual fund( http://www.stockrhythms.com/investing-in-mutual-funds.htm ) companies at this point since they seem to have the deepest advertising pockets and are highly visible in their promotion of "buy and hold". Mutual funds have a strong vested interest in having you buy into the "buy and hold" mentality since their entire business model depends upon the average investor keeping their money parked...through good times and bad. Remember, the mutual fund companies are earning a profit from your investment even while you are accepting losses! So "buy and hold" is really the greatest investment strategy available, it's just a matter of perspective. If you like that your mutual fund company profits while the Bear Market ravages your account value, then "buy and hold" is for you! So let's look at some data to see how this really works. "Buy and Hold" Facts Between 1929 and 2002, there have been 14 Bear Markets with an average of 39% slashed off the value of stocks. During this 74 year period, it took an average of 3.5 years to return to breakeven! Every time a "buy and hold" investor loses money in a down market, they lose invaluable time to reaching their financial goal. After eliminating overlapping Bear Markets, 41 years were spent suffering through a Bear Market or returning to break even. In other words, "buy and hold" investors spend 2/3 of their time just to break even! "Buy and Hold" Myths My favorite myth or scare tactic used by investment gurus is; "buy and hold" investing is critical since you cannot afford to miss the bull run when it hits. And they go on to cite what happens to those that miss the "big days". Ah...good point, what does happen? If you would have invested $100 in 1926 and just left it there until 1993, your investment would have climbed to $80,000. Conversely, if you had tried to time the market and missed the 30 best months, your investment would have only been worth $1,200. "Buy and Hold" Does Work Better? So I've just convinced you that "buy and hold" does work better right? But what would have happened if you used market timing and missed the 30 best months and missed the 30 worst months? Your investment would now be worth $120,000 or 50% more than simple "buy and hold". Not to get too carried away but if you had avoided the 30 worst months and still managed to hit the 30 best months, your investment would have increased to an astronomical $8,600,000. Now I'm not going to try to convince you that market timing is going to hit every winner and miss every loser but I also don't think it's fair for the "buy and hold" advocates to represent only one side of the equation to their benefit either. "Buy and hold" is a guaranteed method of losing money during every Bear Market. Give yourself a fighting chance by looking at a better way to invest. "Buy and Hold" Replacement So how do you avoid losing money every Bear Market with "buy and hold"? The simple answer is "get out of the stock market when it's the Bears turn". Of course, that's usually harder to do than to say. This is where we can help you to become a better stock market investor. Not only are we going to show you how to avoid the Bear Market losses, we're going to show you how to profit from the Bull Market and then turn around and profit from the Bear Market. And I'm not talking about extreme market timing, I'm talking about a conservative, time tested investment process. A Better Investment Plan There is a better way to position yourself for a higher probability of investment profits than extreme market timing( http://www.stockrhythms.com/market-timing.htm )or passive "buy and hold". One that has been tested and proven with over 74 Years of Stock Market Research! Our proprietary Olympic Ring( http://www.stockrhythms.com/how_it_works.htm ) investment system has been issuing profitable trading signals, trade after trade, year after year, and we can start doing it for you too! Maximize your returns while lowering your overall risk through the use of a highly scientific and emotion free system. And unlike the "buy and hold" investment plan, you'll be positioned to profit from the Bear Market and the Bull Market. Now won't that be a change! Let us show you a better way to invest! Call us(toll free: 877-554-4800) today to learn how we can help you earn a profit in both directions. Or download a FREE COPY of our stock market investment book( http://www.stockrhythms.com/mutual-fund-book.htm ) so you can learn from the past to earn in the future - Invest With History ---------------------------------------------- Copyright: www.StockRhythms.com You can reproduce this article as long as you leave this copy right statement unchanged. Gary J
MORE RESOURCES:
Morningstar Launches All-in-One Solution for Variable Annuity Research - MarketWatch (press release)
Google News |
|
|
|
RELATED ARTICLES
Stock Options Trading Strategies - Lean Professional stock options traders use the term lean to refer to one's perception about the directional strength of the stock. When you own a stock option and intend to hold it for a period of time, you are aware that you will probably be holding it while it goes up and while it goes down. Box Of Chocolates Ever have one of those sample boxes of candy? Each little piece is beautifully wrapped in colorful foil or decorated with an interesting design. Taste just one. No Load Mutual Funds: Boost Your Portfolios Returns Investors who exclusively use broadly diversified, no load mutual funds for their stock investments often lose out on opportunities to increase the reward potential of their portfolios. This article looks at two methods investors may use to enhance the performance of their portfolio of diversifed, no load mutual funds. Stock Investment Advice Stock investment advice is easy to find. Do you get cold called by brokers with the latest investment tip? I have, as have countless others around the globe. Pathways During our travel down life's path we come to many places where the trail divides and we must make a decision. Some involve psychological (emotional) choices - marriage, divorce, leaving home, career changes, etc. 9 Deadly Trading Mistakes! The following are a list of nine things you want to avoid at all costs. Anyone of them can literally destroy your financial dreams and goals!1. Which Way The Market I am hearing predictions by brokers, financial planners, talk show hosts and the talking heads on TV that the market is going back to its old highs - DOW 11,700 and NASDAQ 5000 here we come.It seems to me that in 2000 I heard these same people saying there was no top to the market and were looking into their crystal balls for DOW 30,000 or some other fantastic number. Patterns The Law of Chaos is the theory of random unpredictable action applied to the cosmos, mathematics, mechanics, almost everything. Those who believe it will definitely think the stock market is in chaotic state at this time. Political Investing We have two candidates for president that have really different ideas on how to make the economy grow.Bush believes in the entrepreneurial approach. Market Timing Every broker and financial planner will tell you that you cannot time the stock market. I saw John Bogle, the great seer of Vanguard, on CNBC saying it can't be done. The Value of Stocks of a Company The debate rages all over Eastern and Central Europe, in countries in transition as well as in Western Europe. It raged in Britain during the 80s: Is privatization really the robbery in disguise of state assets by a select few, cronies of the political regime? Margaret Thatcher was accuse of it - and so was the Agency of Transformation in the Republic of Macedonia. 365/7/24 What does it take to be a stock trader? It takes a total mentalcommitment to the task. It becomes a complete way of life. Ignore Stock Market Talking Heads You should ignore analysts on TV, the radio, the newspaper and all other TALKING HEADS when it comes to investing! What stocks do they talk about? - The same old group, every day of every year - Why? Because they don't know any better, they are sheep like the general public, repeating what every economic textbook says and every other economist tells them to say. Everyday, the same companies are highlighted on the evening news -WHY?They aren't going anywhere. Can't Stand The Heat It seems that every day I turn on the TV and find a Poker game. Texas No Limit seems to be all the rage these days. The Right Mutual Funds For Baby Boomers If you are a baby boomer, time is not on your side. Many baby boomers see retirement age fast approaching with little to nothing in the way of retirement assets that will allow them to actually retire and live a comfortable lifestyle. Stock Market Volatility In my opinion, due to the volatility of stock market prices (the rise and fall of stock prices), an investment plan should incorporate both the traits of stick-to-itiveness and common sense, and must have an advantageous, predetermined approach for maximizing each investment in the stock market.Stick-to-itiveness and common sense - oh, what powerful weapons they are when used for a long-term investment plan in the stock market! They mean making the common sense and advantages decision to:? Purchase only those companies that have long-term histories of raising their dividend every year. Emotional Involvement I'll bet with almost anyone that has stocks or mutual funds in his portfolio that he has losers, but he won't sell them because he "likes them" or some similar excuse. This is the philosophy of a loser. The Importance of Using Stop Loss Orders When Spread Trading the Financial Markets A Guide to Using Stop Loss Orders Stop losses are market orders designed to allow you to limit your losses.When you place a stop loss you are instructing the spread betting company or stock broker to cut your position when it reaches a certain loss level (or in some cases, profit level - more later). So, What is This Stock Market Thing Anyway? We've all heard of the stock market and probably have a general idea of what it is and how it works either from high school economics classes, television financial reports, and the countless film depictions of what happens on the floor of the New York Stock Exchange. But how does it really work and what is meant by "playing the stock market?"The Stock Market in a NutshellCompanies sell shares of stock as a means of raising capital. Advantages and Disadvantages of Mutual Funds Outlined below are some of the advantages and disadvantages of mutual funds. Every investment has advantages and disadvantages.
|
| Home
| Sitemap
| Disclaimer
| Privacy
| Contact
Us © COPYRIGHT 2011 BRAINBELLY.COM |