Why Buy and Hold?

Since I can remember, and that's a long time ago, the Wall Street brokerage companies, mavens and mutual fund managers have been exhorting the mantra of Buy and Hold for all your investments. There have been erudite studies published that this is the only way to go.

Does it really work or has the little investor been lied to all these years. Of course, you know the answer if you have owned any stocks or funds for the past 3 years. From my analysis the latter is true. The big boys buy and sell all the time. If you look at the executives of companies it seems they all know when to sell ? right at the top before their own company stocks decline. This is easily proven, as the SEC requires all listed-company executives must report both buy and sell transactions. It is not the same as an "insider" sale, but it might as well be, as those guys know if the company is making or losing money. The past couple of years the preponderance of stock sales has been on the sell side.

These sales are easily understandable, but why do brokerage companies want you to buy and hold, especially hold? There are 2 reasons. First, they want to move inventory out of their ownership to you. That transfers the risk and now they have your money.

Even more important, when you HOLD there is less stock for sale, less "float" (fewer tradable issues), and that means it takes less money to manipulate that particular issue.

Also fund managers don't want you to sell their fund once you have bought it because they get paid on the amount of money in the fund not on the performance of the fund. This is a great rip off of the investor causing him to hold an asset that is worth less and less. Many of the large fund managers are paid 7 figure salaries. How can a so-called professional manager receive more than a million dollars to lose money for his clients? Yet, they do!

Buy and hold is a farce perpetrated on the small investor. There are 78 million mutual fund owners and 80% of them have less than $50,000 in their accounts. No one ever says SELL.

Here is one more fact you will not read in the financial media. Mutual funds only work during bull markets. The bull market that started in 1974 (some say 1982) definitely ended in 2000. The longer a bull market is in effect the longer is the bear market that follows and is usually about the same length of time. Scary, huh?! But true.

Now what? Buy and hold? The facts speak for themselves. If you are not a trader the safest place for your money during the next several years is in U.S. government bonds. They won't pay much, but you won't lose your money as this bear eats away at the stock market.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.

1-888-345-7870; al@mutualfundstrategy.com

---

8 Penny Stocks to Avoid

There are many good penny stock investments available, which could... Read More

A Stock Market Investment Plan that Never Lets You Down

The bulls and bears of the stock market are both... Read More

Humpty Dumpty the Stock Market Falls Down

Humpty Dumpty had a great fall and all the King's... Read More

Duct Tape

Did you run out to buy that duct tape yet?... Read More

Downdraft

For the year 2000 we have seen hundreds of mutual... Read More

Option Spread Trading

Spread trading is a technique that can be used to... Read More

Low Expense Ratio

One of the big advertising kicks today from mutual funds... Read More

Investing in the Stock Market

From the book 'The Stockopoly Plan' by the author Charles... Read More

KISS Formula

There are formulas for just about everything, but it has... Read More

Attitude Is [Almost] Everything

I often play a little game with myself when I... Read More

How Commodity Trading Differs from Stock Trading

There are major differences between trading stocks and trading futures.... Read More

One Way Street

Ever turn down a street, get half way and suddenly... Read More

Stock Market Volatility

In my opinion, due to the volatility of stock market... Read More

365/7/24

What does it take to be a stock trader? It... Read More

The Top 10 Reasons to Invest in Mutual Funds

Everyone who follows the financial news has heard of mutual... Read More

Dividends

When is a dividend not a dividend?The latest thing "conservative"... Read More

Investing in the Stock Market - When To!

Is really not as important as to how you invest... Read More

Mid-Cap Stocks: Asset Class with an Identity Crisis

Much like the middle child, mid-cap stocks have long struggled... Read More

Take The Time

You must take the time once a month to review... Read More

Lifestyle Funds Provide Greater Security?

With the stock market stubbornly refusing to settle down and... Read More

Laws and Efficiencies and Theories of Diminishing Returns

The basis of diminishing return discussions surround such simple notions;... Read More

Economists

In today's volatile and confusing stock markets everyone is searching... Read More

How To Beat The Mutual Fund Companies At Their Own Game

You'd have had to be living on a desert island... Read More

What the SEC Really Thinks About Mutual Funds!

Let's go into the details of why non-indexed mutual funds... Read More

Shorting Stocks ? The Basics, Part I of II

What does it mean to short a stock?This means that... Read More

Online Investing & Stock & Share Trading: 4 Reasons Why Most Online Investors & Traders Go Broke

Are you attracted to the idea of being in control... Read More

Stock Market Investments

If there is one term over-used when talking about making... Read More

Never Fall In Love!

Recently I watched my favorite football team lose a vital... Read More

Investment Lawyers and Trash Stocks

The trash business in its efforts to cook their books... Read More

Smart Day Trading Strategies to Help You Make Money in the Stock Market

Stock trading can be a very profitable activity. You can... Read More

The I Word is Coming to a Town Near You

Hello Inflation, it has been awhile, I see you on... Read More

The Right Mutual Funds For Baby Boomers

If you are a baby boomer, time is not on... Read More

Is Active Trading The Answer?

One of the main reasons many of us get into... Read More