Why Buy and Hold Doesn't Work in Your Retirement Years
Updated: May 13, 2019
First let's start with what Buy and Hold means:
Buy and hold is a passive investment strategy in which an investor buys stocks (or other types of securities such as ETFs) and holds them for a long period regardless of fluctuations in the market. An investor who uses a buy-and-hold strategy actively selects investments but has no concern for short-term price movements and technical indicators.
So why are we talking about Buy and Hold? If you've watched my Market Updates you know that there are numerous "end of cycle" signs. As an industry we've been food fed asset allocation, modern portfolio theory, stay the course, it's time in the market.
I don't buy into it anymore. Moving from the institutional side to the retail side I've worked with clients, who are already in retirement, who can't afford a 7 year recovery period.
Let's take a look at the facts.