Friday, February 03, 2012

Thoughts on Investing--from Forbes

Thoughts on Investing--New Rules of Money, courtesy of Forbes

#1 Buy and Hold at your own Risk

These days buying a stock or fund and expecting to hold it forever is lazy and hazardous to your wealth.

A buy-and-hold strategy works well when markets generally go up for long periods of time. But it stopped working a decade ago. Says economist Gary Shilling: “From 1982 to 2000, buy and hold worked but now we’re in a down phase, a secular bear market where downturns are deeper and more frequent and bull moves are less robust. You need to be jungle fighter rather than an easy cruiser.”

Does this mean you have to become a day trader?

No, but you should monitor your holdings and be prepared to sell losers and buy into big new trends.

Steve Cook received his education in investments from Harvard, where he earned an MBA, New York University, where he did post graduate work in economics and financial analysis and the CFA Institute, where he earned the Chartered Financial Analysts designation in 1973. His 40 years of investment experience includes institutional portfolio management at Scudder, Stevens and Clark and Bear Stearns. Steve's goal at Strategic Stock Investments is to help other investors build wealth and benefit from the investing lessons he learned the hard way.