TTBF

Is Buy-and-Hold Dead? Hardly

If you look at the 1929 crash or even the Nasdaq crash of 2000, starting to invest with a 5-10 year time horizon after the initial 60% haircut was a decent gamble. There will likely be plenty more major pullbacks in the market over the next few years. Each one will be a buying opportunity for well-managed companies with solid dividend yields, low price to book values and for even a few growth stocks with defensible businesses.

The real problem with the market right now is shrinking demand and too much supply. Sure, hedge funds are going bust right and left and that will end sometime next year most likely. But boomers have started to pull their money out - for good in many cases as their risk appetite weakens naturally with age. The bull market from 1982 to 2000 was as much a demographic phenomenon than anything else as demand for stocks grew. Most stocks will trade down to their real value - their dividend yield as demand falls off. Everyone will be looking back and wonder why they were paying 25 times earnings for a company yielding 1.5% or nothing at all. Why not just buy a CD? Sure, the company can be purchased for an amount based on their earnings yield. But how often will that happen and how long will those earnings last before a better product/service based on new technology becomes available?



On Nov 14 10:46 PM skyflyz wrote:

> I think the declaration "The Death of Buy and Hold" coming from
> a CNBC show signals a contrary indicator of some sort. I guess we'll
> just have to wait and see.