I think the Buy and Hold Fairy was invented by the Mutual Fund industry who last year had $8.53 trillion in equities under management. Perpetuating the Myth of Buy and Hold is worth a lot of money to them in fees.

What scares me is that those selling the Buy and Hold approach lead people to believe that average annual returns of 8+% can be expected over the long term. This is such a half truth it is a lie. Market history reveals that success through Buy and Hold occurs only when you are lucky enough to hold during a prolonged period when the market does well. There have been three periods longer than 57 years when the US market has achieved no real growth at all after inflation.

The Buy and Hold investor thinks that they can’t lose over the long term but not many realize that the long term on the US market historically has been as long as 130 years! However Buy and Hold is still the best option for most people and far better than not investing at all but for the diligent investor there are far better options.

See how the numbers stack up here – http://etfhq.com/blog/2010/02/19/buy-and-hold/

I think the Buy and Hold Fairy was invented by the Mutual Fund industry who last year had $8.53 trillion in equities under management. Perpetuating the Myth of Buy and Hold is worth a lot of money to them in fees.

What scares me is that those selling the Buy and Hold approach lead people to believe that average annual returns of 8+% can be expected over the long term. This is such a half truth it is a lie. Market history reveals that success through Buy and Hold occurs only when you are lucky enough to hold during a prolonged period when the market does well. There have been three periods longer than 57 years when the US market has achieved no real growth at all after inflation.

The Buy and Hold investor thinks that they can’t lose over the long term but not many realize that the long term on the US market historically has been as long as 130 years! However Buy and Hold is still the best option for most people and far better than not investing at all but for the diligent investor there are far better options.

See how the numbers stack up here – http://etfhq.com/blog/2010/02/19/buy-and-hold/