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reddingrunner (95.94)

Buy and Hold Forever: My Approach

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November 13, 2013 – Comments (6) | RELATED TICKERS: AAPL , VIPS , BIP

I'm not a buy and hold forever guy.  A good investment today might be a terrible investment 20 years from now.  But I do make one exception:  When I buy a stock and it doubles, I sell half (get my original investment back) and hold the remainder (which was essentially free) "forever".  This pays off a lot more often than it hurts me. (And my biggest investing mistakes have probably been the times when I failed to follow this advice- before I formally committed myself to this approach).

Caveat: "Forever" doesn't really mean forever with me.  If one of my "buy and hold" stocks lags for 7 years or more I might consider selling it, though I'll be reluctant to do so unless I have good reasons for thinking that it is in permanent decline.

Wouldn't it be great if every purchase eventually ended up on my "buy and hold forever" list this way! 

6 Comments – Post Your Own

#1) On November 13, 2013 at 7:12 PM, awallejr (83.92) wrote:

When I buy a stock and it doubles, I sell half (get my original investment back) and hold the remainder (which was essentially free) "forever".

That line always bothered me.  Cramer would say that too, even though he says never buy and hold.  Whether it is "free" or not, it is still your money. I am a proponent of buy, hold and MONITOR.  It doesn't matter if you pulled out your original investment.

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#2) On November 15, 2013 at 2:57 PM, reddingrunner (95.94) wrote:

If you read the next paragraph, you would see that I agree.

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#3) On November 16, 2013 at 9:40 AM, thundermas14 (< 20) wrote:

What is your opinion on buying natural sapphires as a long term hold investment? I'm considering buying a few from the site below becuase they rise in price so fast and seem to be less talked about than gold. I'm considering a couple different ones but I read the best investments are the larger stones. What do you think?

 http://www.deliqagems.com/unheated-sapphire-natural-sapphire-3-77-ct/

http://www.deliqagems.com/5-55-ct-unheated-ceylon-medium-blue-sapphire/

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#4) On November 18, 2013 at 1:23 AM, jiltin (26.83) wrote:

 thundermas14, 

I am not so experienced investor, but I have some idea. You need liquidity, but that is unlikely with  natural stones (natural sapphires) including diamond. 

The best one with liquidity is physical canadian maple, but that is not better than stocks.

natural sapphires are very difficult to sell when market or economy is not doing great. People can easily change stones or some other issues. Not recommended. 

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#5) On November 18, 2013 at 1:29 AM, jiltin (26.83) wrote:

reddingrunner,

 I always aim any returns above 25% a year overall. This is what my expectation. 

I have made a rule for me. Buy once, never keep buying again and again when the stock goes up. Sell when I am satisfied with returns. Monitor always. Anytime I break this rule, I really suffer.

How do you select companies, what is the criteria? What time frame do you see doubling stock values? 

 

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#6) On January 31, 2014 at 12:05 PM, sbarnes69 (26.76) wrote:

My strategy is definitely impacted by whether or not the stock is in a retirement account or a taxible one.   Taking a 15% hit on a stock that is fluxuating with the market is more palitable than selling out and buying back in a taxable account.   The locked in taxes on the gains often are too much compared to the relative risk of the stock not recovering long term.   In the 401k/IRA, there is no penalty for locking gains so I am much more take the profit than let it ride if I don't like the trends.

 

Because of this, I buy my "buy forever" stocks and MF in the taxable accounts and the more volitaile or speculative stuff in the retirement account (obviously I am a good ways from retirement or my strategy would be different)

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