Saturday, July 20, 2013

Expert Views - Buying And Holding Stocks Wins. (Strategy)

If you think you will know it when this bull market finally comes to an end, you are kidding yourself.
The vast majority of professional advisers who try to get in and out of the stock market at the right time end up doing worse than those who simply buy and hold through bull and bear markets alike. Even those few who beat a buy-and-hold strategy during one period rarely beat it in the next one. 

What makes you so confident you can do better? 
A surer strategy is to own a broad-market index fund through thick and thin. If you are frightened by the prospect of another bear market, then you should reduce your equity holdings now to whatever level you would be comfortable holding through one.
Though that means you will miss out on gains if the market keeps rising, odds are that you will more than make up for it by losing less in the next bear market.

By Mark Hulbert