For Many Investors: Buy & Sell, Not Buy & Hold
A cogent article in today's Wall Street Journal makes the convincing point that the long-term buy-and-hold strategy has, by now, fallen out of fashion. Investors, especially those discouraged from the recent historically sharp downturn, are saying,
"things are different this time. "The problem I have with the buy-and-hold strategy is that it's a bull-market strategy," says Matthew Tuttle, a financial adviser in Stamford, Conn. "In the bust, you give all of your profits back."
Every time I hear "it's different this time," it usually isn't. That maxim has long been echoed in times of flux, whether it concerns the housing bubble, the internet bubble and going all the way back to the tulip craze.
Of course, the traditional view of die-hard buy-and-hold investor John Bogle disagrees. "It's a fools' game," says John Bogle, the 79-year-old founder of mutual-fund giant Vanguard Group, which helped popularize index funds and the virtues of buy-and-hold investing. Not only will short-term investors pay more commissions, fees and other costs, but various studies have shown that market timers typically lose more money than buy-and-hold investors.
"If you want to trade the market, you've got to be right twice -- you've got to get out and get back in," he says.
What do you think? Is it different this time? Were you always skeptical of "buy-and-hold forever"? What will make money for you this year?
WSJ article
"things are different this time. "The problem I have with the buy-and-hold strategy is that it's a bull-market strategy," says Matthew Tuttle, a financial adviser in Stamford, Conn. "In the bust, you give all of your profits back."
Every time I hear "it's different this time," it usually isn't. That maxim has long been echoed in times of flux, whether it concerns the housing bubble, the internet bubble and going all the way back to the tulip craze.
Of course, the traditional view of die-hard buy-and-hold investor John Bogle disagrees. "It's a fools' game," says John Bogle, the 79-year-old founder of mutual-fund giant Vanguard Group, which helped popularize index funds and the virtues of buy-and-hold investing. Not only will short-term investors pay more commissions, fees and other costs, but various studies have shown that market timers typically lose more money than buy-and-hold investors.
"If you want to trade the market, you've got to be right twice -- you've got to get out and get back in," he says.
What do you think? Is it different this time? Were you always skeptical of "buy-and-hold forever"? What will make money for you this year?
WSJ article