Buy-and-Hold is Not Easy

11) The eleventh tenet of Valuation-Informed Indexing is that buy-and-hold investing is a far more complicated and difficult (but effective!) strategy than it is often portrayed to be.

I have opened section C of our Current Research to address Buy-and-Hold investing. This is where I constructed some tables in Buy-and-Hold Projections and Buy-and-Hold Dollar Projections.

Buy-and-Hold does not always make sense. It takes a lot of time to assure success. Chances are about 20% that you will lose buying power at year 20 if you buy-and-hold stock (i.e., the S&P500) today.

Allow yourself 30 years and you will make money. Take valuations into account (when you make your single purchase) and you are likely to make more money, sooner.

Current Research C: True Buy-and-Hold Investing

Have fun.

John Walter Russell
November 8, 2005