By Team TRADEway
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September 23, 2024
Buy and hold investing is a deeply entrenched mindset that most of today’s investors and investment managers have by default. It’s so widespread as a concept, that not many people are looking at it critically or asking if it still is working in today’s markets–or if another strategy would work better. But this almost universally believed mantra of “you can’t time the market” doesn’t make a lot of sense anymore because of how investing tools have shifted. The thing is, you can take your long-term investments to cash during most volatile times in the market to avoid losing money unnecessarily. And to do this you need to be able to identify market multi-year cycles (or work with someone who can do this for you). We offer such a service with our program AMPT - Assisted Managed Portfolios by TRADEway . Where the Buy and Hold Strategy Originated Buying and holding through the market’s worst days can be devastating for your portfolio. So why does almost everyone do this? The “buy and hold” recommendation was made famous by John Bogle in his book The Little Book of Common Sense Investing , which was published in 2007. In it, Bogle argued that the fees that mutual fund managers charge rule out the extra returns they get from actively buying and selling in the market. He showed you would profit more, and avoid lots of drama, by simply buying and holding index funds like the S&P and others. But does this argument still hold up? Where Bogle Got Buy and Hold Wrong Bogle made the assumption that most people aren’t going to bother to learn the skills required to get in and out of the market effectively. And he’s right, most people won’t want to bother learning how to do that. It takes a solid stock market education to time getting in and out of the market consistently. And making a mistake with regards to timing the stock market can really cost you. But with the right training, tools, and expertise, timing larger market cycles is actually very doable. In our program AMPT , our Investment Advisor Representatives carefully monitor the market for breaks in market trends. And with our expertise (and the nimbleness that comes with not being in a mutual fund) we can get you out of the market more quickly, saving you from losing money unnecessarily. We also have an option within AMPT where you can request to have our investment advisory representatives do shorter-term trades using a portion of your money (we recommend no more than 20%). This can lead to a boost in your account that you can then turn around and re-invest. Maybe the idea of trusting someone else to get your money out of the market and knowing when to put it back in makes you nervous. That’s understandable, given how much buying and holding is preached in our society. Our long-term investing team are all registered investment advisors representatives. Our current roster manning the AMPT division include beloved stock trading Coaches Geoffrey Nance , Jenny Taylor , Jared Russell , and Ben Russell , and they are all well-versed in the market’s multi-year cycles.