Dividends4Life: Buy and Hold Will Always Be a Sound Investing Strategy

It seems like the debate regarding the merits of the "buy-and-hold" investing strategy is alive and well. We always find these discussions amusing, because we believe that it is such a pointless discussion. There is no general argument or case that can be made to support the buy-and-hold strategy or to negate it. The only true answer to the buy-and-hold argument is it depends on what and/or when you buy-and-hold. If you buy the right company at the right price, then buy-and-hold is a great strategy. If you buy the wrong company at any price, then the buy-and-hold strategy is a dumb move. Also, if you buy the right company at the wrong price, then buy-and-hold would once again be a bad move.

At the end of the day, the practical application of a well thought-out and disciplined buy-and-hold strategy has proven itself and really needs no defense. In the long run buy-and-hold will be more tax efficient and less costly than more active strategies. This is not to say that more active strategies can't be profitable, it simply means that they're more difficult, costly and riskier to execute effectively.

Source: Seeking Alpha

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