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My friend Pete threw up his hands in exasperation as Monday's selling intensified and groaned…
"…how do I find a stock I can hold forever?!"
Like millions of investors, Pete's fed up with financial markets he can't control, and he positively hates the pit in his stomach he gets wondering whether or not it's "here we go again" time.
"Buy and Hold" Is Dead… Do This Instead
You're not alone if you feel like Pete.
"Buy and hold" is dead, which is why Monday's dramatic sell-off was so scary for so many investors, including a good number of professionals.
Just ask anybody who watched the Global Financial Crisis turn their 401(k) into a 201(k) for the second time in under a decade. Waiting for a comeback simply isn't in the cards when self-preservation is a more pressing concern.
Wall Street wants you to believe that stuff like this is a flash in the pan and that "buy and hold" is the way to get around market skittishness. Then again, they want you to believe a lot of stuff, most of which is in their own self-interest.
Buy and hold is not an investment strategy but a marketing gimmick. And it's not a short-term problem fixer either, like most investors would like to think.
The problem is even worse over longer periods of time.
Investors waiting to break even following 1929's crash and burn had to sit on losing investments for 26 years, for example. Investors who endured the bull/bear cycle beginning in 1965 had to wait 17 years for the markets to tap new highs in 1982.
In other words, investors who were counting on the markets "coming back" spent 41 of 52 years between 1929 and 1982 waiting for them to do so.
Wall Street loves this because they can prey on your deepest, darkest fears to keep you buying and selling long after the markets have changed direction. Naturally, that means more of your money in their pockets, which is why they maintain the illusion of financial prosperity associated with "buy and hope"… err… hold.
Buy and manage is a much more profitable way to go for three reasons.
First, buy and manage frees you from the emotional turmoil that devastates most investors and causes them to make costly, irrecoverable errors when the markets get choppy.
Second, buy and manage puts you in charge so you are never at Wall Street's mercy. Big traders cannot fleece you if you don't give them the opportunity to do so in the first place.
And, third, buy and manage helps you rack up big profits and keep them.
Wall Street will never tell you this because it's one of their dirtiest little secrets, but "they" don't buy and hold with their money… why should you?!
I've spent a lifetime distilling buy and manage down to three deceptively simple steps that are at the core of ever…
About the Author
Keith Fitz-Gerald has been the Chief Investment Strategist for the Money Morning team since 2007. He's a seasoned market analyst with decades of experience, and a highly accurate track record. Keith regularly travels the world in search of investment opportunities others don't yet see or understand. In addition to heading The Money Map Report, Keith runs High Velocity Profits, which aims to get in, target gains, and get out clean, and he's also the founding editor of Straight Line Profits, a service devoted to revealing the "dark side" of Wall Street... In his weekly Total Wealth, Keith has broken down his 30-plus years of success into three parts: Trends, Risk Assessment, and Tactics – meaning the exact techniques for making money. Sign up is free at totalwealthresearch.com.