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Varchild2008 (85.90)

This is NOT a trader's market anymore. . . .

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October 13, 2008 – Comments (3) | RELATED TICKERS: DPS , ATVI

Jim Cramer is completely dead wrong along with 99% of the entire population of Motley Fool CAPS to label the stock market as merely a "Traders market" where the only way to make money is to frantically trade in and out of stocks like a nutcase on acid.

Here's the deal....

Prices go up and prices go down.... Penny stocks tend to be trade only stocks as companys go under.  A recent penny stock that is NO MORE is (CELI), a celebrity promoter company.

And certainly there are reasons to trade instead of buy and hold.

But here's the deal...

If I were to buy a stock 10 years ago and then watch as my investment evaporated last week to exactly where it was 10 years ago is that such a bad thing?  I mean.. Wouldn't I merely buy up a crap load more shares last week and when I retire...when the market is up again on these stocks.. sell em off?

A Buy and Hold Strategy is a perfectly good strategy if you have the patience to simply buy into your stock when your stock is dirt cheap each and every time the market collapses.

The market goes down at least once every 10 years so you have multiple opportunities to buy into your stocks at the original sticker price.  And nothing is wrong with that.

Also consider that a Buy and Hold strategy like with (ATVI) Activision Blizzard has rewarding opportunties throughout the years as your stock splits and splits and splits.....

ATVI split recently last month around Sept. 19th.

Beverage Companies like Coca Cola and Pepsi have split dozens of times....

The Stock Market is full of stock splitting....

And when a stock splits you get more shares... more shares....more shares... more shares...

So let's do the math:

100 Shares of Coca Cola   is    LESS THAN     1,000 shares of Coca Cola.

10 years ago you start with 100 shares of Coca Cola in your Buy and Hold strategy and eventually you accumulate off the dips 1,000 shares of Coca Cola and then you retire.. and then you liquidate and you pocket something like:

$45,000   off that stock alone.

So enough is enough with this B.S.  TRADER's MARKET ONLY   crap.
I don't have the ability to trade stocks....

But I certainly can BUY and HOLD and do my homework to ensure my investments are still good.

So... From now on... I am buying and holding because TRADING only got me to lose thousands of dollars thus far.

3 Comments – Post Your Own

#1) On October 13, 2008 at 9:11 PM, awallejr (79.57) wrote:

Well buy and hold can also be bad too if you bought and held onto a bad company, obviously.  And a company could be great one year and turn horrible 5 years from now.  So while I adhere to building a "core account" of buy and hold stocks (which pay dividends and grow them consistently year over year), you still have to monitor to make sure the thesis of holding them is still intact.

Cramer, on the other hand, just churns you to death.  You will always miss the turns.

The safest, and most conservative is to just hedge all your positions with call/put collars.  But that does require you to monitor your investments more closely.  Caps your profit return, but protects on the downside.

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#2) On October 13, 2008 at 9:28 PM, rudolphsteiner (< 20) wrote:

I suggest you look at this

http://bigpicture.typepad.com/comments/2005/12/100_year_bull_b.html 

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#3) On October 13, 2008 at 10:17 PM, Varchild2008 (85.90) wrote:

Welp I'll just keep holding and doing my homework and seeing how well I do next year as I already wrote off 2008 as a failure.

On the bright side I could shave off some shares for the tax refund.

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