Why Buy And Hold Investing Strategy Is Dead And What Is The Solution?

admin 0

Buy and hold had been a time tested and proven method of investing for many decades. This was what Benjamin Graham advocated in his Intelligent Investor and this is what Warren Buffet practically did in the next few decades to build his investment portfolio of around $50 Billion.

Warren Buffet has always thought of stocks as buying ownership right. He meticulously studies the management of the company before he invests in its stocks. But in the recent stock market crashes he did not do well. Why? Buy and hold is simply dead as an investment strategy.

This is what the gurus are advocating now and it makes a lot of sense. Using buy and hold in the present market is just financial suicide. It will only ruin your portfolio. The present markets are too volatile for the buy and hold to succeed.

In the past two decades, program trading and online trading has totally changed the way the stock markets operate. Hedge funds are looking for quick profits. They are not 온라인홀덤 interested in buy and hold. They just want to make a superior return to please their clients. They will buy anything that can guarantee them a quick profit.

So, you will find these hedge funds and institutional investors pumping in millions of dollars in one stock in matter of minutes using program trading or dumpling millions of shares of a stock in minutes. What it does is introduce a lot of volatility in the stock market.

Online trading makes it possible to buy and sell stocks from anywhere in the world. You just need a computer, an internet connection and an online brokerage account to start trading online. Just a few clicks are needed to buy or sell the stocks.

Whatever, this quick buying and selling in the market makes them volatile. In the past, you had to call your broker by telephone and tell him to buy or sell stocks for you. But not anymore, you just need a few clicks to do it yourself. This volatility in the market makes buy and hold dangerous.

Welcome to the stock market of 2011. You will have to learn to live with the volatility in the stock market. The best way is to profit from this volatility. One way is to follow the emerging mini trends in the different market sectors using ETFs. Another way to profit from the volatility in the stocks is to choose a particular stock and profit from the volatility in that stock using binary options. Good Luck!

Leave a Reply

Your email address will not be published. Required fields are marked *