The New Challenge For Buy-And-Hold Investing

By Sungarden Investment Research via

Passive Index investing’s pitfalls are on full display. 

Just look at the Dow 30 to start.

  • Buy stocks of great companies and hold them
  • Be a long-term investor
  • It’s time in the market, not timing the market
  • Own the whole market
  • Ride out the bumps
  • 20% declines in stock prices are healthy
  • The Easter Bunny is real
  • Martians live among us

The first six bullet-pointed items above are all investment myths that are in the process of being busted.  The other two are non-investment myths that were long-ago busted (spoiler alert!).  So we will focus on the first six, which have more relevance to investors anyway.

When you put that top group of six together (and many investors do), they create an attitude about and approach to investing that is no longer a fit for most investors.  I say that not because there is no merit to each one of them…there is.  But investing for real-life objectives like a desired lifestyle in retirement, funding a home or kids’ education, etc. has been greatly oversimplified.

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