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5. February 2009 by John.
Over the years many investors have come to believe the old adage about being a ‘long term investor’ That being the case, many advisors and the media told anyone who would listen that they should buy stocks for the long term. In other words…buy & hold.
Anyone subscribing to that theory today had better prepare to work forever. Retirement will not be an option. If you look at the Dow Jones and its components, check out their price today, and then go to Yahoo Finance and check their price 10 years ago. SHOCKED???
Another reality check is this:
The Dow Jones opened January 1, 1999 at 9181
The Dow Jones opened January 1, 2009 at 8776
If you had bought an Index Fund ten years ago, not only would it be worth less in today’s $, if you factor in inflation, it would actually be about 50% of what you started with.
Don’t get caught in that trap.
Buy & Hold is DEAD. Stockpicking is ALIVE.
Posted in Investing | Print | 1 Comment »