Hopefully a couple of things are becoming obvious on this blog, I am trying to find out if Buy and Hold is better than an Actively Managed ETF Portfolio (or vice versa) and secondly, that I am a fan of Kiplinger. Steven Goldberg, Contributing Columnist for Kiplinger.com, has a very recent article on buying and holding stocks. Here is an excerpt:
"Scared of stocks? Who can blame you? Standard & Poor's 500-stock index lost a staggering 55% from October 9, 2007, through March 9 of this year -- the worst bear-market loss since the Great Depression. Foreign stocks got hammered even harder. Bonds -- except for Treasury IOUs -- suffered, too.
But as surely as sunrise follows night, bull markets follow bear markets. Jeremy Siegel, a finance professor at the University of Pennsylvania's Wharton School and one of the nation's best-known market historians, thinks that a bull market has already begun -- and that it will be a dandy. (Siegel also writes a column for Kiplinger's Personal Finance.) Indeed, the S&P 500 soared 36% from March 9 through June 26.
Over the next ten years, Siegel predicts, the market will return roughly 8% annualized -- after inflation. If Siegel is right and consumer prices rise 3% a year, as they have over the long haul, U.S. stocks will deliver double-digit returns -- not every year, but on average -- over the next decade."
So this sounds like very good news and actually bodes well for both the Buy and Hold Investor and the Active Portfolio Management Investor that this blog is based on. The big question right now is will there a time when the Buy and Hold Investor should sell and protect his capital? It certainly seemed that way from October 2007 through March 2009. We'll keep the experiment going and see what the future holds. I suggest you read the complete article here.
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