Does Buy-and-Hold Reduce Risk?

How do you reduce risk in your investment portfolio? Most people try to do so by diversifying their assets and avoiding stocks when fears are high. But new research indicates the best risk-reducing measure is to buy stocks — and hold them, Marketwatch’s Chuck Jaffe says.

Hulbert: Buy and Hold Still Wins

If you’ve spent time lately trying to figure out when the four-plus-year bull market will come to an end, Mark Hulbert has a message for you: Stop 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,” Hulbert writes in his MarketWatch column. “Even those… Read More

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 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… Read More

Hulbert, the Crisis, and … Poker Hands?

In his latest column for the New York Times, Mark Hulbert examines an interesting study on buy-and-hold investing. The study — “When Everyone Runs for the Exit,” by Lasse H. Pedersen, professor of finance at New York University, concludes that it’s not traders or true long-term buy-and-hold investors who get hurt the most in a liquidity crisis like the one we’ve just experienced — it’s the investors who end up stuck in the middle. Pedersen… Read More

Top Strategists Talk “Buy-and-Hold”

The Financial Times recently interviewed several top strategists about the viability of “buy-and-hold” investing, and found that some are espousing more of a “buy-cheap-and-hold” approach. “In a challenge to the received wisdom of holding stock market investments for 20 years or more, to smooth out short-term volatility, some suggest that measures of cheapness can be used to make buying decisions and enhance performance,” writes the Times‘ David Stevenson. Here’s a sampling of what some of… Read More

Mauldin: This Time It Really Is Different (Sort Of)

In his latest “Thoughts from The Frontline” newsletter, John Mauldin makes a pretty bold proclamation that goes against a long-held principle of investing — this time, he says, things really are different. “If memory serves me, I have written several e-letters disparaging various personages who have uttered those very words, and gone one to confirm later that it wasn’t different,” Mauldin writes. “It almost never is. … But my premise for uttering the heresy ‘This… Read More

Oberweis: Don’t Ditch Buy-and-Hold

While buy-and-hold investing continues to draw criticism from some pundits, money manager and newsletter guru Jim Oberweis begs to differ. In a recent interview with The Motley Fool, Oberweis says that buy-and-hold is alive and well, because timing the market remains an incredibly difficult task. “Show me some quantitative evidence that someone’s right, and then I’m interested,” Oberweis said in response to the buy-and-hold bashers. “I’m a numbers guy. I don’t know anyone who has… Read More

Bogle on What “Long-Term” Really Means, and Stock-Picking Dangers

Jack Bogle covers a wide variety of topics in a recent interview with The Motley Fool, including just what the “long-term” in “long-term investing” should mean, why traders usually lose out, asset allocation, and whether the S&P 500 is a “good” index. Bogle’s belief that that the best approach for individual investors is to hold the entire stock market for the long term through an exchange-traded fund or index fund is well known, and he… Read More

Bogle on Valuations, the Economy, and Where to Invest Now

In a recent interview with MarketWatch, John Bogle says he thinks the market “probably has it about right” in terms of current valuations, but adds that investors should expect slower growth than they’ve grown accustomed to when the economy does turn around. “I would guess the market probably has it about right,” Bogle said. “I would guess that we have seen the low for the year and maybe the low for this cycle. … I’m… Read More

Hedge Fund Guru: Buy & Hold Far from Dead

Is buy-and-hold dead? Lloyd Khaner, whose hedge fund has a successful two-decade track record, tells that he doesn’t think so — though he says successful implementation of a buy-and-hold approach isn’t as simple as many assume. “Buy and hold for the smaller, individual investor is not gone,” says Khaner, whose Khaner Capital fund (which does not use leverage) has posted positive returns in 15 of the last 18 years and is ahead of the… Read More