Buying and holding for the long term assumes that one is willing to settle for whatever long-term average return is generated.
Buying and holding for the long term also assumes that one can successfully select a stock, or group of stocks, whose fundamentals will continue intact.
Technology is moving ever more rapidly and for most corporations the relevant competitive context has become worldwide, whether or not they wish it were so. These facts imply that selections of companies likely will not remain valid as long as they could in the past.
In a dynamic world, a static portfolio is by definition a fatally flawed strategy.
Bottom line: One year's favourable and seemingly stable fundamentals are not a given that can be assumed in perpetuity, much as we might wish they could. The price of investment success is constant vigilance.
The advice to buy and hold long term begs a critical question: buy and hold what?
Keep INVESTING Simple and Safe (KISS) ****Investment Philosophy, Strategy and various Valuation Methods**** The same forces that bring risk into investing in the stock market also make possible the large gains many investors enjoy. It’s true that the fluctuations in the market make for losses as well as gains but if you have a proven strategy and stick with it over the long term you will be a winner!****Warren Buffett: Rule No. 1 - Never lose money. Rule No. 2 - Never forget Rule No. 1.
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