An Ode to Buy & Hold
Thank you for staying with the ship while it is taking on water and the storm is approaching. Sure it is still floating after the last storm, but it has taken on a lot of water since then. Not everyone can get in the life rafts. Thank you for waiting.
John Bogle just passed away and his legacy is low cost investing for all of us and I salute him for that.
But low-cost does not mean risk-free or loss-free. John Bogle was a proponent of buy and hold investing, but then again, he knew not everyone could sell at the same time and get out. So, in aggregate, the market needs buy and hold investors so the smart money could get out high and buy back low.
It is always the capitulation of buy and hold investors that give us those deep lows from which the market can recover and start its next bull market. So, thank you twice.
Every time I post an article about how the 2018 highs in the stock market exceeded the 1929 and 2000 stock market highs… Or how the SP500 would have to lose 57% of its value relative to revenue or cyclical earnings to return to the highest bear market trough in history (2009)… Or how much debt the world has taken on since the financial crisis that was caused by too much debt… I get comments on Facebook or elsewhere along the lines of “Buy and hold is the way to go, stay with it”.
To these people, I say thank you.
For everyone else, I hope you join us sooner than later. It is getting interesting out there.
Invest safe, invest smart.