Buy And Hold? A Sure Loser For Amateur Investors…Like Us.

March 25, 2009 | Author dragonfly

Gary D. Halbert’s Forecasts & Trends…

Ideas are strengthened when they are endorsed by informed experts. Gary Halbert has been proving for a very long time that the buy and hold strategy is flawed. Below is an excerpt from another of his brilliant articles on this topic.

Unspoken by Mr. Halbert but obvious from the article is the corollary that most Americans should not be investing in the first place.

Recognize that investing for the long term is an oxymoron. If you had used the buy and hold strategy starting in 1998 and planned to rely on your investments for income in 2009, you would have less money today than you invested over the past ten years. You would have lost money. Your $200,000.00 investment could be worth less than $90,000.00.

On the flip side, if you had prudently placed you money in a quality whole life insurance policy you could have almost $250,000.00 in cash values growing tax free and readily accessible for income, opportunities, emegencies, or a legacy for those you care most about.

America has been bamboozled by the shennanigans of the chalatans and scallyways of Wall Street for too long. It’s time to return to America’s fundamental financial model – save, build equity in your home, finance only when it’s absolutley essential, invest only form assets and never from earnings or ready reserves.

More Buy-And-Hold Myths Debunked

by Gary D. Halbert

March 24, 2009

“…Unfortunately, this has not slowed the flood of misinformation being distributed by the usual suspects in an effort to support buy-and-hold investment strategies. It seems that the more I write about skewed articles, studies, etc., the more examples I see of them being generated by Wall Street and the brokerage community to sway unsuspecting investors. [emphasis added]

I recently received an e-mail from a major mutual fund family promoting the buy-and-hold concept. While I am not at all surprised that a mutual fund company would be trying to keep investors in their funds, I was disappointed to see that the argument used was a very old, and thoroughly discredited line of reasoning known as “don’t miss the best days in the market.”

I’m not going to disclose the company that published the e-mail I received, but it really doesn’t matter. You can look in the archives of virtually any major brokerage firm or mutual fund family and likely see similar titles. As I pointed out in the March 3 E-letter, it’s in their best interests for you to stay invested, even though doing so may not be in your best interest. Thus, you need to look out for your own best interest when you deal with them.”