I’ve posted Entry #113 to my weekly Beyond Buy-and-Hold column at the Out of Your Rut site. It’s called Buy-and-Hold Works Better — But Not At All Well — After the Passage of 30 Years.
Juicy Excerpt: You only get that 5 percent return at the end of 30 years if you refrain from selling any stocks during the time-period when your you are seeing five sixths of the accumulated wealth of a lifetime disappear into thin air. Can you do it? Can anyone do it?
I have my doubts. I just don’t think that humans are capable of taking that sort of hit. My guess is that fewer than one in ten Buy-and-Holders ends up sticking with his high stock allocations through an entire bull/bear cycle. So I view it as irresponsible for so many of the “experts” in this field to endorse Buy-and-Hold strategies.
Still, the numbers say what the numbers say. If you only look at the numbers, and ignore the question of whether it is possible for most investors to do what it takes for Buy-and-Hold to pay off in the long run, Buy-and-Hold can be said to “work” at the end of 30 years regardless of the valuation level that applies at the beginning of the 30 years.