Buy-and-Hold Still Working in "New Normal"

While many have claimed that “buy-and-hold investing is dead” in recent years, Validea CEO John Reese says in his latest Nasdaq.com column that the approach continues to work better than many market timing approaches — even during the alleged “New Normal”.

Reese points to multiple studies showing how market-timers have struggled in both the shorter and longer term, as well as his own success with long-only fully invested approaches. “Take my three top-performing Guru Strategies (investment models based on the approaches of history’s greatest investors) over the long haul,” Reese writes. “While the S&P 500 is basically flat since that 2007 peak, my Benjamin Graham-inspired portfolio is up over 30%; my Motley Fool-based portfolio is up more than 40%; and my Kenneth Fisher-based portfolio, while not as prolific as those first two, is up about 9%. These portfolios have all been 100% invested in stocks throughout the entire period — through the Great Recession and financial crisis, European debt crisis, Chinese slowdown, fiscal cliff, and sequester. They’ve had ups and downs to be sure, but they’ve proven that good strategies can produce strong returns if you stick with them through rough periods.”

Reese looks at five stocks that currently get approval from one of those three models. Among them: National-Oilwell Varco, which gets high marks from his Graham-based model.