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Long Term Buy And Hold

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I have posted before alluding to the theme of this post before but downward movement of the markets since April (and the seemingly accelerated rate in last few days) has focused my mind on it again......

There was, apparently, a large increase in public participation in equity markets (i.e people 'getting on board) in the latter half of the 1990's. With the exception of the get rich quick day trader types chasing dotcoms, etc in the very final stages of the 1990's bull market, the majority I suspect are/were those who accepted that their money needed to be tied up for 5 years minimum (i.e were long term buy and hold types).

BUT after the Bear of the first few years of the 2000's they had to watch as their portfolios painfully slowly but steadily climbed back to roughly breakeven. Then, for some, they may even have seen their portfolios climb into positive territory (in nominal terms!) around 2007. BUT then they watched those hard won gains evaporate even more quickly a second time round post-2008.

These investors, especially those who were late middle aged in the mid-1990's, are now the better part of 15 years closer to retirement with very little (if anything!) to show for it.

After the post 2008 slump they witnessed yet again the old adage that the 'market always bounces back'.

Surely, now that these people are watching the markets teeter precariously, threatening to take them back to late 1990's territory these people will unwilling to risk losing their 'paper' gains a third time - and will call it a day and head for the exits? OR, is the greed just to great to bring them to hit the sell button.

IF they do, could we see a third an biggest decline yet in equity markets? taking them, albeit for a short while, to genuinely oversold and finally good values?

Time will tell I guess.

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Most equity analysis concentrates on the US stock market which had its own bubble and then lazily extends that to apply to all stock markets, even where they didn't have a bubble.

The UK stock market doesn't look over-valued IMO.

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Most equity analysis concentrates on the US stock market which had its own bubble and then lazily extends that to apply to all stock markets, even where they didn't have a bubble.

The UK stock market doesn't look over-valued IMO.

My point wasnt whether stocks are good value. It was more a case of a certain hard to define 'point' being reached where long term equity investors take fright and decide they really cant afford to (or stomach) wait out another 2+ years just to get back to where we are now. The clock is ticking and retirement approaches. Put another way, surely a point will come when those who previously would not sell at a loss (however small) will now start thinking more about getting a return of their capital rather than worry about what return on their capital they might make.

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Guest absolutezero

My point wasnt whether stocks are good value. It was more a case of a certain hard to define 'point' being reached where long term equity investors take fright and decide they really cant afford to (or stomach) wait out another 2+ years just to get back to where we are now. The clock is ticking and retirement approaches. Put another way, surely a point will come when those who previously would not sell at a loss (however small) will now start thinking more about getting a return of their capital rather than worry about what return on their capital they might make.

Buy and hold is a strategy more aimed at income seekers rather than traders.

Buy, hold, enjoy the dividends and don't bother too much about capital value.

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Buy and hold is a strategy more aimed at income seekers rather than traders.

Buy, hold, enjoy the dividends and don't bother too much about capital value.

Most obviously suitable for a diversified portfolio of blue chips.

Wish I'd had the courage of my convictions in the 1980s, when I realised Tescos was transforming from grotty tat to becoming far-and-away the best supermarkets. I could see that would add lots of value, but naturally assumed that if I could see that then it would already be factored into the share price :huh:

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Most obviously suitable for a diversified portfolio of blue chips.

Wish I'd had the courage of my convictions in the 1980s, when I realised Tescos was transforming from grotty tat to becoming far-and-away the best supermarkets. I could see that would add lots of value, but naturally assumed that if I could see that then it would already be factored into the share price :huh:

I made the same mistake over Wetherspoons and will buy next time I see something similar.

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Guest absolutezero

Most obviously suitable for a diversified portfolio of blue chips.

Wish I'd had the courage of my convictions in the 1980s, when I realised Tescos was transforming from grotty tat to becoming far-and-away the best supermarkets. I could see that would add lots of value, but naturally assumed that if I could see that then it would already be factored into the share price :huh:

1. "The Market" is not rational in any way at all.

2. Nobody really knows anything you don't.

3. Nobody can predict the future.

That's why buy and hold is best.

Edited by absolutezero

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fwiw, i think that 'buy and hold' is dead. Those that made gains to see them fall and climb again are gripped by fear and greed, what else will they do with their cash? Am not a nut talking about another great depression but it is easy to see what happened to investors then and the gamblers mentality, the waiting for prices to become favorable again or even just to touch break even.

Does anyone trust that another crash is so improbable that they will commit to a longterm buy and hold anymore?

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Guest absolutezero

fwiw, i think that 'buy and hold' is dead. Those that made gains to see them fall and climb again are gripped by fear and greed, what else will they do with their cash? Am not a nut talking about another great depression but it is easy to see what happened to investors then and the gamblers mentality, the waiting for prices to become favorable again or even just to touch break even.

Does anyone trust that another crash is so improbable that they will commit to a longterm buy and hold anymore?

Not at all. In fact another crash is likely.

Eventually the share prices tends to recover.

With my strategy I buy a set of shares every month so even if it does crash it's a buying opportunity.

Provided it pays a decent dividend and continues to do so then capital value doesn't really matter.

Share prices are, in a lot cases, cyclical and history tends to repeat itself.

The only people who tend to win with trading are the brokers.

Edited by absolutezero

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I definitely think buy and hold is the way to go with the caveat that I only buy after corrections.

There is no rush to investing if you are doing so for the long term so you may as well wait for decent market corrections before topping up each time.

I invest primarily in ETFS and some mutual funds for specialist shares like junior gold miners.

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I definitely think buy and hold is the way to go with the caveat that I only buy after corrections.

There is no rush to investing if you are doing so for the long term so you may as well wait for decent market corrections before topping up each time.

I invest primarily in ETFS and some mutual funds for specialist shares like junior gold miners.

Yes. Timing is (nearly) everything. A good company will pay a good dividend for many years, but buying at the wrong time will greatly reduce the overall gain over time.

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  • 145 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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