Around the Minnesota year-end holidays, I frequently think about my past relatives. This holiday season my thoughts have often turned to my grandparents.
One of my grandmothers grew up in North Dakota and lived the remainder of her life in Minnesota. She taught me the meaning of “don’tcha know” at a very young age. It always brings a smile to my face when I remember hearing my grandmother say it.
Don’tcha know does not ask a question. Instead, it is states a fact. In all cases it is a fact that you really need to pay attention to.
Past investment experience can teach valuable lessons. The trick is to remember those lessons the next time you need them.
Buy and hold investing in the stock and bond market does not work, don’tcha know.
A buy and hold investment strategy does not work with any investments in this day and age. You can’t buy and hold your education. The same goes for your job. You can’t buy and hold your health. How have you done buying-and-holding your house?
There have been two great U.S. stock market declines in the last ten years. Each one has cost a buy and hold investor dearly. Years of stock market gains were completely wiped away in just a few weeks.
The Wall Street media machine came up with the buy and hold investment strategy many years ago. The largest financial services and mutual fund companies continue to sell that message the current generation of investors.
Financial service companies want individual stock and bond market investors to remain invested at all times. That is exactly how they generate their largest amount of investment advisory fees.
Mutual fund companies also want individual investors to remain invested in their mutual funds at all times. A buy and hold investment strategy is also in the best financial interest of the largest mutual fund companies.
A buy and hold investment management strategy provides much needed stability to the corporate earnings of Wall Street and financial services companies. Buy and hold does not provide the same stable long-term investment performance to individual investors.
Take the truth about buy and hold to heart. Your participation in the next great stock market decline is optional, don’tcha know.
Ric Lager
Lager & Company, Inc.
