Buy and Hold Investment Strategy

Prior to expanding within 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 exactly why. Click here to find out more about 8I Holdings.

"Buy and Hold" Promoters

Companies at this time given that they seem to have the deepest advertising pockets and are highly visible in their promotion of "buy and hold".

Shared funds have a strong vested fascination with having you buy in to the "buy and hold" mentality given that their entire business model is determined by the average investor keeping their money parked... via good times and bad.

Remember, the shared fund companies are earning a profit from the investment while you might be accepting failures!

So "buy and hold" is actually the greatest investment strategy available, it's just a matter of perspective. If you want that your mutual account 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 exactly how this works.

"Buy and Hold" Information

Among 1929 and 2002, there has been 14 Bear Markets by having an average of 39% slashed off the value of shares. During this 74 year period, it took an average of 3. 5 many years to return to breakeven!

Every time a "buy and hold" investor manages to lose money in a down market, they get rid of invaluable time to reaching their own financial goal. After removing overlapping Bear Markets, 41 many years were spent suffering through a Keep Market or returning to break even.

In other words, "buy and hold" investors spend 2/3 of their time in order to break even!

"Buy and Hold" Misconceptions

My favorite myth or scare tactic used by investment gurus is usually; "buy and hold" investing is critical because you cannot afford to miss the bull run when it hits. And they also go on to report what happens to the people that miss the "big days".

Ah... good point, what does occur? If you might have invested $100 in 1926 and just left it there until 1993, your investment might have climbed to $80, 000. Conversely, if you had tried to time the market and missed the 30 best months, your investment might have only been well worth $1, 200.

"Buy and Hold" Does Work Better?

So I've just convinced you that "buy and hold" does work better correct? But what would have happened if you used market timing and missed the 30 best months and missed the 30 worst a few months? Your investment would now be well worth $120, 000 or 50% greater than easy "buy and hold".

To not get too carried away but if you had avoided the 30 worst a few months and still managed to hit the 30 best a few 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 will hit every winner and miss every loser but I also don't think it's fair for that "buy and hold" advocates to represent only one side of the equation to their benefit either. For more info check out Hemus Pacific.

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