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Gordon Pape
Gordon Pape

Is Buy and Hold Dead?

June 16, 2012 | About:

About the author:

Gordon Pape
Gordon Pape is the best-selling author/co-author of many acclaimed investment books, including the recently-published Sleep-Easy Investing (Viking Canada ). He is also publisher and editor of five investment newsletters, including the Internet Wealth Builder, Mutual Funds Update, The Income Investor, and The Canada Report, which was created specifically for U.S. residents interested in investing in Canada . He is a columnist for several magazines and websites and a frequently quoted media source. He has been a featured speaker at numerous events including the World Money Show in Orlando . His websites can be found at www.BuildingWealth.ca and www.TheCanadaReport.com.

Rating: 2.5/5 (14 votes)


Cornelius Chan
Cornelius Chan - 5 years ago    Report SPAM
Good article. Solid advice. Keep up the steady-as-she-goes articles Gordon!

If one dollar-cost-averages their way using high quality stocks, there can't be much downside if you are looking at a 30 or 40-year time horizon - which I am. All the companies we are looking at on the charts today will be at multiple X higher in a decade and especially multiple decades from now.

Tonyg34 - 5 years ago    Report SPAM
Straw man fallacy.

a balanced index fund (60/40) with regular contributions (monthly) has returned more than 4.5% since January 2008.

In real world investing people don't just make one buy and hold purchase decision, they make an asset allocation plan and then make regular contributions over their investment lifetime.

Hell, the yield on a balanced index fund like VGSTX is 2.5% a year, so the dividends a passive index investor earned over your sample holding period would be more than double the returns you gave them credit for.
Go_loe - 5 years ago    Report SPAM
Lots of it depends on "what you buy & hold"
Bogle_Fan - 5 years ago    Report SPAM
Junk article. I'll take a 60-40 total stock market/total bond market etf portfolio over a financial advisor's actively managed portfolio over a 30 year plus time frame any day of the week.
Darrenh11 - 5 years ago    Report SPAM
Unfortunately this gentleman is not telling the whole story. A partial truth does not make him right. The goal of index investing is to track the market using the index as a benchmark. Think about where all of these were at in January of 2008 and where they were at as of April 30. Considering this I think a 4.5% return is tolerable especially considering the low cost of the strategy. The other important factor that is not taken into account is regular rebalancing of the portfolio which would like boost the speculative return he quotes by forcing the passive investor to buy low. This is a terrible article.

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