Econ 101 wrote:
Ghost of Igloi wrote:
I have nothing against buy and hold. Many who profess to be buy and hold investors sell in a bear market. Today a buy and hold investor in a 10 year US Treasury will get a 1.37% annual return. At current valuations an investor in SPY should anticipate similar returns over the same time horizon.
Buy and hold may be a bad strategy for someone heading into retirement since sequence of returns could have adverse consequences for portfolio survivability.
I'm sorry, but you're flat out wrong. Buy and holders don't typically sell in a bear market. People who sell in bear markets are not buy and holders. I would have thought you would know that.
Also, I don't expect returns in the next 10 years to match historical averages, but they'll be a multiple of the 1.37% you suggest.
I agree with Igy that many if not most people who profess to be buy and holders...aren't. They sell in a panic at the worst times. The stats are horrifying - that the average investor makes something like 2% per year while he should make something like 7%. Mostly because of being scared out of the market.