The buy-and-hold investment strategy has taken a lot of abuse since the market turned down. But this isn't the first time it has happened. It seems that each time the market cycles down, the same group of naysayers come out proclaim buy-and-hold as dead and attack it most visible proponents like Warren Buffett, John Bogle and Jeremy Siegel. Eventually, the market turns, the naysayers disappear and the buy-and-hold investors make a lot of money.
In an earlier article, I noted that Jason Zweig had called into question the validity of data used in Jeremy Siegel's book "Stocks for the Long Run". Given the recent market declines and credibility questions, has Mr. Siegel abandoned his long-held beliefs in "buy-and-hold" and "stocks for the long run?"
To the contrary, Mr. Siegel in a recent MSN Money article was very adamant about his position. Below are some of the relevant points he made:
I have long been an advocate of selecting Dividend stocks using a Value based approach (hence the name of my site DividendsValue.com). Over time, low priced, quality stocks that pay an increasing dividend will out-perform their competition. Here are several of those stocks pulled from my Dashboard:
Automatic Data Processing Inc. (ADP) - Analysis
Automatic Data Processing Inc. is one of the world's largest independent computing services companies, provides a broad range of data processing services.
Dover Corp. (DOV) (ADP) - Analysis
Dover Corp. manufactures a broad range of specialized industrial products and sophisticated manufacturing equipment.
Emerson Electric Co. (EMR) (ADP) - Analysis
Emerson Electric Co. primarily makes backup power equipment for telecom and Internet providers and users, climate control components, and electric motors.
Johnson & Johnson (JNJ) - Analysis
Johnson & Johnson engages in the manufacture and sale of various products in the health care field worldwide.
United Technologies Corp. (UTX) - Analysis
United Technologies Corp. is an aerospace-industrial conglomerate with a portfolio including Pratt & Whitney jet engines, Sikorsky helicopters, Otis elevators and Carrier air conditioners, among other products.
Even in investing, fads come and go, but quality will always endure. When the chips are down, go for the blue ones.
Full Disclosure: Long EMR, JNJ, UTX. See a list of all my income holdings here.
Related Articles:
Is It A Good Time To Buy-And-Hold Stocks?
Posted by D4L | Sunday, July 26, 2009 | commentary | 0 comments »________________________________________________________________
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