(with less risk than
a simple buy and hold strategy, see how on the next page)
Not exact matches
Common sense tells us —
and history confirms — that the
simplest and most efficient investment
strategy is to
buy and hold all of the nation's publicly
held businesses at very low cost.
Switching out of stocks
and into cash before the onset of a recession yields a performance bonus of more than 5 % over a
simple buy -
and -
hold strategy.
The
buy and hold strategy is the
simplest one, yet it's one of the most difficult to implement because you have to sit down
and do nothing.
The updated edition contains chapters on asset allocation
and retirement investing
and expounds upon Bogle's
simple and effective
strategy for long - term investment success:
Buy and hold a low - cost fund that tracks the Standard & Poor's 500 index.
My
strategy is
simple —
buy shares in the big banks when they are valued attractively
and hold for a long period.
I use a
buy and hold strategy that involves very little trading, no market timing, no chasing winners, no day trading, no listening to «experts» on TV,
and no selling when the market crashes, which keeps things
simple and keeps my transaction costs
and taxes low.
The unusually strong performance of US stocks in 2013 was a welcome surprise for investors who are following a
simple buy -
and -
hold strategy and a source of exasperation for many professionals caught flatfooted by the steady rise in share prices.
* This also means that if you use $ SPY (no leverage), this model would underperform a
simple buy -
and -
hold strategy.
You could do a
buy and hold strategy, but it's better to be a bit more active
and do something as
simple as a SMA cross over
strategy.
The best way to implement this
strategy is indeed
simple:
Buy a fund that
holds this all - market portfolio
and hold it forever.
In the April 2013 version of his paper entitled «Easy Volatility Investing» (the National Association of Active Investment Managers» 2013 Wagner Award runner - up), Tony Cooper explores the rewards
and risks of five volatility trading
strategies including
simple buy -
and -
hold, price momentum, futures roll yield capture, volatility risk premium capture
and dynamic hedging.
Even a crude market timing
strategy such as an 80 day
simple moving average trendline crossover of the S&P 500 index would have done far better than a
buy and hold approach.
WHile
buy and hold is a
simple and easy - to - implement
strategy, I've become convinced that a better approach (even for long term investment horizon) is to use stops or, even better, trailing stops.
It would be interesting to see if, over time, such
simple timing when applied to double exposure ETF's beats a
buy -
and -
hold strategy.
The Growth eREIT ™ has a
simple buy -
and -
hold strategy focused on value investing in low to moderate cost housing where demand exceeds supply.
Evidence (charts based on data that goes back to 1986) that
buy - write
strategies (BXM)
and put - writing
strategies (PUT) outperform collar
strategies (CLL)
and simple buy and hold is widely distributed
and well understood by experienced option traders.
The levered
and hedged
strategy that maximizes exposure to the market — Hedge at 2SD, Lever at Mean — outperforms the
simple buy -
and -
hold strategy, but does so with an enormous drawdown.
All the returns are improved, but the
strategies continue to underperform the
simple buy -
and -
hold strategy over the full period.
Yet, any serious review of the results of market gurus over a long period of time reveals a track record that is no better (usually worse than) a
simple buy -
and -
hold strategy.
A move to
simple systematic rebalancing to fixed weights increases the value add by 0.14 %
and 0.26 % relative to the
buy -
and -
hold and average factor
strategies, respectively.
This
simple trading
strategy outperforms a 60/40 portfolio, regardless if the latter is rebalanced on a monthly basis, a five - year basis, or not at all (a pure
buy -
and -
hold strategy).
How do you know that a fancy - schmancy
strategy will beat a
simple buy -
and -
hold strategy?
Options are powerful tools that can be used by investors in different ways,
and there is a relatively
simple options
strategy that can benefit
buy -
and -
hold stock investors.
Vanguard's Wellington
and Wellesley Income Funds are good example of successful
buy -
hold - rebalance
strategies with long - term histories,
and extremely
simple as one has only to purchase a single fund.
The company, which says it has a
simple strategy to
buy and hold Class - A office
and industrial properties with credit tenants on long - term leases, recently snapped up the nation's third largest office building.