Comments on: Keep faith in buy-and-hold

By: Investors behaving badly — Canadian Capitalist

Investors behaving badly — Canadian Capitalist — Thu, 07 May 2009 13:14:02 +0000

[...] The DALBAR update isn’t surprising. The QAIB has consistently shown a large gap between the returns investors actually earn and the return they could have easily earned with a buy-and-hold strategy. [...]

By: John Jacobs

John Jacobs — Fri, 06 Mar 2009 09:41:20 +0000

People always talk about the Japanese lost decade but they fail to mention that Japanese companies just aren’t that exciting. Besides high valuation, most Japanese companies have low ROEs (ask yourself why Buffett has avoided Japanese companies). There is something to be said about investing in ’strong companies.’

By: Results of Dollar Cost Averaging for the TSX Composite

Results of Dollar Cost Averaging for the TSX Composite — Tue, 03 Mar 2009 04:55:48 +0000

[...] their savings gradually over time. After reading a passage in The Intelligent Investor on how such a dollar cost averaging strategy performed during the Great Depression, I was curious to see how it would have performed in recent [...]

By: Canadian Personal Finance Blog » Blog Archive » Random Thoughts

Canadian Personal Finance Blog » Blog Archive » Random Thoughts — Fri, 27 Feb 2009 12:32:06 +0000

[...] Canadian Capitalist advises us to Keep Faith in Buy and Hold, which I think is important to remember, even with recent [...]

By: moneygardener

moneygardener — Thu, 26 Feb 2009 13:23:40 +0000

It annoys me every time I see the BNN commercial where Michael Hainesworth asks somebody:

IS BUY AND HOLD DEAD?

This is rediculous. Of course people are asking these questions at this time in the market cycle. That is like asking IS THERE ANY EASIER WAY TO MAKE MONEY THAN IN THE STOCK MARKET? ..during an exuberant bull market.

By: gene

gene — Thu, 26 Feb 2009 01:30:20 +0000

I haven’t seen such a blatant cliff-hanger since “Who shot JR?”. Well, maybe since “Who shot Mr. Burns?”.

I recall somewhere in “The Intelligent Investor” where Graham has some condition whereby equities will very likely outperform bonds, but I don’t recall the exact condition. It was perhaps something about comparing corporate bond yields to dividends.

By: EconStudent

EconStudent — Wed, 25 Feb 2009 22:57:50 +0000

Daniel: Good point. So what should we do instead? Putting every thing we earn into a saving account or T-bills, because the long run risk there is that we might under perform inflation. Oh wait. Real Return Bonds. That might be a solution.

I think indexing is good, since it removes the more speculative nature of picking individual stocks. Understanding different asset classes is good too, since the efficient market hypothesis doesn’t apply there at the highest level. For a person near retirement, bonds need to be the majority of the portfolio. Ben Graham recommended 25% equity/ 75% bond portfolio for those who has lower risk profiles. I guess that is the case seventy years ago and is still the case now.

I don’t know. What do you think?

By: Daniel Kozimor

Daniel Kozimor — Wed, 25 Feb 2009 22:09:49 +0000

>There are no sure and easy paths to riches on Wall Street or anywhere else.

The world would be a better place if this statement was commonly understood.

By: EconStudent

EconStudent — Wed, 25 Feb 2009 19:57:53 +0000

CC: A reasonable risk premium is what Bogle suggests every investor to do.

Jeremy Grantham says that it is easier to see overvaluation between asset classes than between stocks. William Bernstein pointed out that rebalancing between asset classes is a good way of increasing long run returns. Efficient market hypothesis says that it is very difficult for investors to pick a group of stocks and beat the market, but it might be different in the case of asset classes where it is possible to overweigh undervalued asset classes beat the average return of the global stock market.

By: Dividend Growth Investor

Dividend Growth Investor — Wed, 25 Feb 2009 18:43:43 +0000

CC,

I agree that the main reason why Japanese and US markets had poor performance the past decade is because valuations were super rich. The thing to buy a decade ago have been CD’s ( certificates of deposit, not the music CDs )