"No man can become rich without himself enriching others"
Andrew Carnegie

Monday, August 5, 2013

How to Win with “Buy and Hold”

1903 stock certificate of the Baltimore and Oh...
1903 stock certificate of the Baltimore and Ohio Railroad (Photo credit: Wikipedia)
By The Rude Awakening

Baltimore, Aug.5, hot stock picks .- Buy and hold is back.

You don't know it yet. But I predict the resurgence of "buy and hold" investing themes will become a major market meme sometime over the next couple of years. And you should have no trouble profiting from its timely return.


Because everyone and their mother is onboard the "Buy and Hold is Dead" mantra. The financial media has pounded it into our skulls for nearly five years now. You can't just buy a few good stocks and sit on them, they say. If you do, the market will humiliate you.

In fairness, buy and hold investing has been a frustrating proposition until recently. Fear kept most investors sidelined until the market was near its highs, only to shake lower as the next crisis reared its ugly head.

As a result, investors started to adapt to the whipsaw conditions…

"I remember articles saying 'Buy and Hold' is dead [after the financial crisis]," writes a careful reader. "I myself became more of a trader than a buy and hold investor."

It wasn't just individual investors that changed gears. Hedge funds also got a little too cute with their market timing attempts. That's why they have collectively trailed the MSCI All-Country World Index for five of the past seven years…

Everyone has desperately tried to outsmart the markets. And for the most part, they've failed.

But this year is different. No big shakeouts so far. Stocks are dramatically higher. Investors are beginning to see a light at the end of the tunnel.

All of this paves the way toward a resurgence of buy and hold and longer-term trend following strategies. If you continue hone your trend-following chops with me by tracking the best performing stock and sector setups, you'll have no trouble riding the strongest names on the market to new highs…

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