Buy and Hold Investment Philosophy

Wall Street has been preaching the doctrine of Buy and Hold forever. The worst part about it is the small investor (and some big ones) actually believe it. Brokers and financial planners believe it, but when you show them they can get a better return by timing the market they just say, "It can't be done". They are either lazy or stupid.

Most brokers have not learned their trade - investing. Webster says that means putting money into something (stocks) for the purpose of obtaining an income or profit. When people look at their brokerage statements these days they must wonder where their broker went to school. Investors could have done better with a dartboard.

Brokers are not taught to make money. They are taught all the regulations that come out of Washington that must be followed so the brokerage company will not be sued. To my knowledge none of them are taught the basic fundamentals of increasing customers' wealth or protecting the customers' capital from loss.

Brokerage houses hire people to do reports about companies. They call them analysts, but today those jobs have deteriorated into snow jobs to get people to buy stock in a particular company. When you read the report you will find it very professionally done with pretty pictures and graphs and charts. Wow! I'll buy that. And a few months later you will wish you hadn't. When you have a loss the standard reply is, "Don't worry. You are in for the long haul. The market always comes back". In your lifetime? Today there are hundreds of stocks that have lost 50% to 90% of their value and there is absolutely no hope they will ever recover those losses. But?.you are in for the long haul. You now have the Buy and Hold philosophy.

Why do so many people cling to this doctrine?

You have a stock you bought for $40 per share that went up to some profitable number and now is down below $10/share. You're out 75% of your money. You are waiting for it to go back up so you can get out "even" and I will tell you "even" is a loser.

Many years ago I heard a story about how they used to catch monkeys in Africa. A hole was made just big enough for the monkey to get his outstretched hand in a hollowed out coconut shell. Fruit and sweets were placed inside. The monkey put his hand in and gripped the goodies, but could not remove his clinched fist. It refused to let go even when the hunter came to put him in a cage. All the monkey had to do was let go of the candy and he could have escaped.

Many investors are the same way about the stock they bought. They won't let go. The investor does not want to admit he was wrong. You are not wrong until you sell - just broke. Small losses will not hurt you, but holding on can put you in the poverty cage. Buy and Hold conventional wisdom will break you. Learn to let go of the losers quickly and you will preserve your capital.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.

Copyright 2005

[email protected]; 1-888-345-7870

In The News:

Here are the mutual fund favourites in April  MoneycontrolMaximum month-on-month change in value was seen in TCS, ICICI Bank and Kotak Mahindra Bank.
Stock markets @ record high: 3 tips for mutual fund investors  Times NowNew Delhi: Stock markets grab all eyeballs when the headline equity indices hit record highs or near the previous all-time high levels. From traders to long-term ...
A young investor’s guide to mutual funds  Economic TimesMany young investors, who are barely a year or two old in their career, are eager to start investing in mutual funds. ETMutualFunds.com receive many queries on ...
D-Street’s mandate not clear yet, best to stagger your bets: Experts  Economic TimesThe return of the BJPled NDA government has eased political uncertainties on Dalal Street but that should not be a reason for investors to put money in stocks in ...
Large cap index mutual funds continue to outshine actively-managed large cap schemes  Economic TimesLarge cap index funds are outperforming the actively-managed large cap mutual fund schemes in the past one-year period. Kotak NV 20 ETF is topping the ...
Top 10 large, mid & smallcap stocks MFs bought in April; do you own any?  MoneycontrolMutual fund (MF) inflows moderated in April even though Indian stock benchmarks rewrote history. The Sensex touched a *fresh* record high of 39,487 on April 18 ...
Stocks vs Mutual Funds: Which is a Better Option to Invest?  EntrepreneurStocks and Mutual Funds have their own set of hiccups, which are better to know before making your investments.
Reliance Capital to exit MF biz, use funds to cut debt  Economic TimesMumbai: Reliance Capital, the financial services business of the Anil Dhirubhai Ambani group (ADAG), has decided to exit mutual funds by selling its entire ...
Why do wealth managers recommend multi cap mutual funds?  Economic TimesMany wealth managers believe multi-cap funds are a good starting point for long-term investors, specially those using SIPs for wealth creation.
What makes an ELSS the ideal first mutual fund?  Economic TimesMany mutual fund advisors say ELSS or Equity Linked Saving Schemes are ideal for investors to begin their investments in equity mutual funds. They say the ...
India’s second biggest fund house busy lapping up stocks that are down 45-72%  Economic TimesICICI Prudential Asset Management, the country's second-largest money manager by assets, was busy all through April lapping up beaten down stocks, when ...
Quant funds are suitable for savvy investors with equity portfolio  Business StandardA few fund houses are in the process of launching quant-based schemes to remove human bias in stock-picking. DSP Mutual Fund's (MF's) DSP Quant Fund ...
Hot and Cold Stocks of Mutual Funds in April 2019  MoneylifeIn April 2019, Larsen & Toubro and Hindustan Petroleum Corporation(HPCL) were the most preferred stocks of Indian mutual funds.
Investing in mutual funds? Size of fund doesn't matter  Economic TimesA bigger MF is not always a better fund. If you come across a well-performing small fund, invest in it.
Time to shop? 150 stocks at attractive valuations vs historical levels  MoneycontrolOnce short-term uncertainty subsides, investors are likely to chase value. Attractive levels are starting to emerge in the midcap universe and select opportunities ...
Vetri Subramaniam, UTI Mutual Fund, talks about which stock segments he favours now  Economic TimesIndia's growth trajectory has been consistent over the past two decades and many firms have performed well across cycles, Vetri Subramaniam, Group President ...
Sebi allows mutual funds in exchange traded commodity derivatives  Economic TimesNEW DELHI: The Securities and Exchange Board of India (Sebi) on Tuesday allowed mutual funds to participate in exchange-traded commodity derivatives ...
Indians won’t invest in stocks, debt till election 2019 ends  QuartzInvestors in India are waiting the election out. In April, inflows into equity mutual funds (MFs) dipped to their lowest levels since January 2017, according to data ...
India’s top money manager just dumped a number of blue chips to bet on midcaps  Economic TimesHDFC Asset Management, the country's largest mutual fund house by assets, lightened its largecap holdings and bought additional shares of select midcap and ...
How concentrated is your mutual fund portfolio?  LivemintA concentrated portfolio can backfire badly if the fund manager's strategy goes wrong.A portfolio with few stocks can fall sharply if share prices of most stocks in ...
What to buy now? Brokerages pitch over 30 stocks to ride Modi 2.0 wave  Moneycontrol.comWith the Modi government back in the saddle, the focus of the market will shift to the growth cycle, with RBI expected to be more accommodative.
As market prepares for Modi 2.0, here are 13 stocks to invest in for five years  Moneycontrol.comEarly trends put NDA in a comfortable position to form the government that has, to an extent, already been factored by the market after exit polls.
Retail Investors Should Take Exposure To Midcap Stocks Through Mutual Fund Route: Ankit Jain, Mirae Asset Global Investments  BW BusinessworldIn an interview with BW Businessworld, Ankit Jain, Fund Manager, Mirae Asset Global Investments (India), talks about Consumption led funds, lending rates and ...
MF holdings of auto stocks at record low: Motilal Oswal study  BusinessLineMutual funds' holdings of auto sector stocks stood at a record low in April, finds a study by broking house Motilal Oswal Securities. The weightage of the auto ...
What netas invest in: mutual funds, Reliance, KF shares  Deccan HeraldFixed deposits and tax-free bonds seem to be among the most favoured financial investments for the political leaders fighting the 2019 Lok Sabha polls, while ...
Monetary policy and Budget could be game changers for markets in the near term  Moneycontrol.comThere can be minor bumps and bouts of profit booking due to the elevated levels, but events like monetary policy and Budget can be game changers which can ...
How Vanguard Patented a Way to Avoid Taxes on Mutual Funds  BloombergControversial heartbeat trades help the funds avoid taxable gains.
7 Smart Mutual Funds for Income Investing | Dividends  U.S. News & World ReportMany investors turn to bonds and dividend stocks as their first destination for income. However, picking individual stocks can be daunting and building a ...
More active managers are beating the stock market again thanks to the trade war: Goldman Sachs  MarketWatchActive stock pickers are having one of their best years since the financial crisis, and these money managers can thank rising U.S.-China trade tensions for their ...
Holding of mutual funds in private lenders at a fresh high in April  Business StandardThe holding of mutual funds (MFs) in private banks saw its weightage increase to a new high of 19.3 per cent in April — the seventh straight month of increase.
Stay away from stock tips  LivemintIf taming the stock market was easy, everyone would do it.Losing money in market is real and facing volatility is part of the deal.
Your investing technique is successful only if you meet your money goals  Economic TimesFollowing the right processes plays an important role in achieving investing success, but it is not enough.
How to Choose Between ETFs and Mutual Funds  U.S. News & World ReportInvestors can add either mutual funds or ETFs to their portfolio.
Equity funds record highest ever exposure in banking stocks in March 2019  Business TodayAs per the latest data available from the SEBI, overall deployment of equity funds in bank stocks grew around 52 per cent year-on-year (y-o-y) in the month ...
Don’t write off fund managers, they still have a lot to offer  Economic TimesEquity funds of late have struggled to keep pace with their benchmark indices.
Look who is sitting on a cash pile to buy stocks after election result  Economic TimesMUMBAI: The domestic equity market is likely to trade in a narrow range until the election results, with foreign fund flows slowing down and mutual funds opting ...
Will these mutual funds help me to build Rs 50 lakh?  Economic TimesI am a new investor in mutual funds. I am 30 years. My aim is to build a corpus of Rs 50 lakh or more in 10 years. I am planning to invest through SIP in mutual ...
Betting on: FIIs, MFs raise stake consistently in 8 companies in last 4 quarters  MoneycontrolThe first and the most important step towards wealth creation is stock selection. Ideally, stocks selected or filtered should be based on your own research ...
Robo advisory not for everyone, works best for investors with small capital  Business StandardA click of the button is all it takes to access online financial planning websites or robo advisory platforms. But if you are looking to draw up a detailed financial ...
What Type of Mutual Fund Schemes Should You Invest in? Know Here  News18Equity funds are mutual funds which invest majorly in equity stocks of listed companies. They are considered to be risky but they tend to give higher returns in the ...
Essel group companies shares fall 2-10%; Reliance Mutual Fund exits  Business StandardShares of Essel group companies fell 2-10 per cent on Wednesday on worries about its stake sale getting delayed. Meanwhile, Reliance Mutual Fund (MF) ...
For new investors, starting SIP in Nifty50 and Nifty Next 50 is ideal: HDFC Securities  Moneycontrol.comFor *fresh* investors, starting with SIP in Nifty 50 and Nifty Next 50 is ideal. On the way, they have to learn about evaluating stocks and their valuations, Deepak ...
Avoid investing in mutual fund NFOs: Here's why  Economic TimesWait for a fund to build a track record and prove its credentials before putting money in it, say experts.
IT, pharma and telecom top sectoral picks for MFs in April  Economic TimesIn the absence of earnings growth triggers, which has shrunk the universe of investible ideas, leading fund houses have resorted to selling more of a part of their ...
Mutual Fund Update: Stocks that attracted fund managers in April 2019  Dalal Street Investment JournalIf we look at the March 2019 data, then the energy sector was the one that featured on top of the buying done by the fund managers. However, the story in the ...
Top fund managers take shelter in blue chips in view of event risks  Economic TimesMost of these companies have reported a rise in March quarter profit.
Reliance MF writes down debt exposure to 2 other ADAG firms  Economic TimesMUMBAI: Reliance Mutual Fund (RMF) said late on Sunday it was writing down the value of its holdings in Reliance Commercial Finance (RCFL) and Reliance ...
When volatility becomes the norm in equity market, here’s what to do  Economic TimesMarkets have been quite volatile in recent times, but instead of seeing it as an adversity, volatility deserves to be seen as investor's best friend. While investors ...
Smallcap funds on recovery path, return 3.7% over last three months  MoneycontrolSmall cap funds seem to have started on a recovery path returning roughly 3.68 percent over the last three months compared to the over 16 percent negative ...
Best Online Stock Broker: Which Do Mutual Fund Investors Favor?  Investor's Business DailyWhich are the best online stock brokers for mutual fund investors? Data from IBD's Best Online Brokers survey shows those that rate highest.
Liquidity Scare: NBFC stocks slide on fears of spillover  Economic TimesAny default or downgrades in NBFC space will have a cascading impact on the entire sector.
Golden Cross | Midcap and small cap indices are set for fresh bull trend, says ICICI Direct  Moneycontrol.comNifty midcap and small-cap indices are witnessing the Golden Cross phenomenon, indicating a bullish shift in trend direction, along with the maturity of 14-month ...
Stop! Too many stocks, mutual funds are not good for you; Buying too many may not get you more  The Financial ExpressHandling the overall risk of investments is crucial, but not at the cost of not meeting your financial goals. Over-diversification can do this.
A Look At How To Ride Out Stock Market Storms  NPREscalating trade wars and volatile markets cause some investors to make hasty decisions that can lead to financially damaging decisions. But there are ways to ...
Bech de kya? How to answer this question in stock market  Economic TimesThe phone rang. And I was not surprised. This name always lights up my phone screen when the market hits a new level – high or low. And the question is ...
Forget Warren Buffett: This fund manager has walloped the stock market over the past decade  MarketWatchWhen the “Woodstock of Capitalism” took place a few weeks ago, aka Berkshire Hathaway's BRK.A, -0.37% BRK.B, +0.19% annual meeting, the Warren Buffett ...
Why Tech Brands You Know Do Badly After Going Public  ForbesJust because you know a tech company's product, don't buy stock at its IPO unless it has this one rare feature -- it's growing profitably.
These new retirement tips can improve your saving and spending decisions  MarketWatchBest New Ideas in Retirement series offers solid, straightforward help with your plans.
Shadow banks feel sting as mutual funds cut exposure  Economic TimesMF investments in commercial paper and bonds dropped to Rs 3.24 lakh crore at the end of March.
People Want to Buy Uber Stock  Bloomberg“Uber IPO Is Oversubscribed by Day Two of Roadshow,” it says here, but I would say that Uber Technologies Inc.'s initial public offering was oversubscribed by ...
Invest in These 4 Thrivent Mutual Funds for Great Returns  Zacks.comBelow we share with you four top-ranked Thrivent mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy)
China Stocks at the Mercy of Foreigners Like Never Before  BloombergThe record pace of foreign selling in China's equities matters now more than ever. While overseas traders are quickly souring on yuan assets, they've also never ...
How to Invest in Stocks: Complete Beginner's Guide  MoneyCheckThinking of investing in the stock market? Then read our complete Beginner's Guide to investing in stocks for everything you need to know.
Look where HNIs are parking money amid equity, debt market uncertainty  Economic TimesWhen Indian stocks were rallying this March-April to hit new peaks, the country's high net-worth individuals, or HNIs, were thinking of cross-border options to ...
What Makes Berkshire Hathaway Shares Better Than an Actively Managed Mutual Fund?  Motley FoolTo start with, the company is a lot more than Warren Buffett's carefully selected stock portfolio.
Pakistan stocks cap worst week in 17 years after securing bailout from IMF  Business StandardRead more about Pakistan stocks cap worst week in 17 years after securing bailout from IMF on Business Standard. It secured its 13th IMF bailout since the late ...
Top fund houses among main bidders for Voda Idea issue  Economic TimesMUMBAI: Franklin Templeton, Eastspring Investments, ICICI Prudential Mutual Fund and SBI Mutual Fund were among major financial institutions to bid for the ...
3 reasons to buy stocks now as fear unsettles Dalal Street  Economic TimesExperts are advising investors to buy when there is fear in the market instead of sitting on the sidelines.
For First-time Investors, Here's All You Need to Know about About Mutual Funds  News18It is that time of the year again when the question of where to invest your money clouds your head. If you are a new investor planning to put in money in mutual ...
Corp FDs, NCDs draw investors wary of debt MFs  Economic TimesMUMBAI: The prevailing stress in debt mutual funds is prompting investors to put incremental money into fixed deposits and non-convertible debentures (NCDs).
Stocks in the news: YES Bank, Bharti Airtel, Federal Bank, Bharat Road, Reliance Capital and ICICI Bank  Economic TimesL&T's software arm LTI will be hiring around 3800 freshers this fiscal.
3 Japan Funds to Gain From a Robust Economy  NasdaqJapan has showcased resilience in times of global economic slowdown. Its first-quarter GDP nudged up, putting to rest speculation about an impending.
Best And Worst Q2 2019: Technology ETFs And Mutual Funds  Seeking AlphaThe Technology sector ranks eighth in Q2 2019. Based on an aggregation of ratings of 430 stocks in the Technology sector. TDIV is our top-rated Technology ...
TD Ameritrade Cuts Fees on ETF Trades in Further Blow to Mutual Funds  TheStreet.comAs competition heats up in the exchange-traded funds industry, TD Ameritrade nearly doubles the roster of ETFs eligible for commission-free purchases....BLK.
Stocks melt as Trump turns up the heat in trade war with China  LivemintMUMBAI: Indian stocks joined a global sell-off on Monday as heightened trade tensions between the US and China, the word's largest economies, risk derailing ...
Investors Helped Build Tesla. They Could Undo It, Too.  The Wall Street JournalThe reasons Tesla climbed so far and is now stumbling are one and the same. The auto pioneer relies on investor confidence the way its cars rely on electricity.
Millennials, Don't Let This 1 Mistake Ruin Your Financial Future  The Motley FoolThe Great Recession had a huge impact on every generation, but perhaps none more so than millennials who came of age during this challenging time.
Top 10 stocks that mutual fund managers bought and sold in March 2019  Moneycontrol.comData for equity flows into mutual funds for March came as a breather after a weak February. An increase in net inflows in equity and income category led to the ...
Best And Worst Q2 2019: Healthcare ETFs And Mutual Funds  Seeking AlphaThe Healthcare sector ranks fifth in Q2'19. Based on an aggregation of ratings of 325 stocks in the Healthcare sector. PJP is our top-rated Healthcare sector ET.
The Wild Frauds Are the Good Ones  BloombergThere seem to be two basic approaches to financial fraud. One approach is to pretend to do a real thing as accurately as possible, with the minimum necessary ...
What India's top three mutual funds bought and sold in March  Economic TimesIndias largest money manager held 1.5 trillion rupees in equities.
Wall Street Isn’t Buying What Silicon Valley Is Selling  The Wall Street JournalPrivate investments in six of the 10 best-funded U.S. tech startups to go public since 2015 have fallen from the peak levels they hit in funding rounds before the ...
Can mutual funds give multibagger returns like stocks?  Economic TimesStocks can be multibaggers. They can offer extraordinary returns in a very short period. Can mutual funds ever do that? This was a question thrown at Rajeev ...
5 of the Best Vanguard Funds to Buy  Investorplace.comAnother year, another batch of jaw-dropping inflows to Vanguard exchange-traded funds (ETFs) and index funds. Focusing on ETFs for a moment, as of May 17, ...
Govt tweaks rules, increases limit to disclose investment in stocks, mutual funds for employees  Economic TimesNew Delhi: The Centre has increased the over 26-year-old monetary limit on disclosure of investment in shares and mutual funds by employees to six months of ...
I want to invest Rs 1 crore in stocks and mutual funds for 5 years. How should I invest?  Economic TimesYou may consider the following asset allocation: 40% in large-caps; 40% in large and mid-cap, or multi-caps; and remaining 20% in mid- and small-cap funds.
7 stocks most favoured by mutual funds over last one year  Economic TimesAs the markets hit a speed bump, stocks favoured by mutual funds appear to be safer bets.
Active mutual funds fail to reflect index gains  Economic TimesThe Nifty, which has hit all-time highs for the second time in April, has advanced 12% in the last one year. But these gains are yet to reflect in many mutual funds' ...
Mutual funds or direct equity investment – which is better?  Economic TimesOne big question that often dogs investors is which investing option should they opt for: mutual fund or direct equity? Katalyst Wealth's Ekansh Mittal ends your ...
Mutual Funds increase holding in ‘attractively valued’ oil & gas stocks  Economic TimesMUMBAI: Mutual funds have been adding shares of oil and gas companies such as GAIL, HPCL, BPCL and ONGC over the last few months, encouraged by ...
Mutual funds shooting themselves in the foot?  Economic TimesWhat if banks take a leaf out of Kotak and HDFC Mutual Funds' decision to direct investors to come another day to get their money instead of paying them on the ...
Mutual funds bet big on these 30 stocks in November; do you own any?  Moneycontrol.comThe Indian equity market rose about 5 percent in November but what was more heartening to see was inflows into mutual funds. Investors pumped Rs 1.4 lakh ...
Mutual funds sell several blue chips stocks, buy mid-caps in March  Business StandardDomestic money managers were seen pruning their holdings in several blue-chip stocks, including Reliance Industries (RIL) and Housing Development Finance ...
What top 5 money managers bought and sold in February  Economic TimesFebruary was the fourth consecutive month of decline in net investment into equity mutual funds.
Quantum Mutual Fund uses cash pile to buy stocks cheap  Economic TimesQuantum Long Term Equity Value Fund, where value investing is the pronounced fund allocation theme, has brought down the level of cash at its plan to the ...
Why your core equity portfolio should be in index mutual funds  Economic TimesInvestors flock to the performing fund “after” it has beaten the index. Fund selection is not an exact science, and there will be hits and misses.
27-year-old rule changed: Disclosure limit on MF, stock investment up for bureaucrats  Economic TimesGroup A and B officials had to intimate government if total transaction in shares or MFs exceeded Rs 50K.
Here’s a better tool to judge mutual fund performance than simple 1-year, 3-year returns  Economic TimesOne invests in mutual funds to earn potentially higher returns than those in traditional investment products, and I'm sure everyone looks at the one-year, ...
What top mutual funds bought and sold last month  LivemintMumbai: Inflows into Indian equity mutual funds in January were the smallest in two years as heightened market volatility and political uncertainty cooled ...
Should I increase investments in mutual funds once I have more money to invest?  Economic TimesI am a 19-year-old student. I want to invest Rs 2,500 per month in mutual funds for 7-8 years. Can I increase the investment amount with time—once I have more ...

Your Trading Objective: Why is that so Important?

You've decided to try your luck at trading stocks or... Read More

Swing Trading Strategies

Using Swing Trading Strategies and Technical Analysis when Trading Stocks... Read More

Overseas Investing: Going Against the Mainstream

TOO OFTEN, INVESTORS SIMPLY CHOOSE TO follow the crowd. This... Read More

Evaluation II

As I said in Part I everyone in the insane... Read More

Invest In The Stock Market For The RIGHT Reason, Using The RIGHT Choices

Invest in the stock market for the RIGHT reason, using... Read More

Never Lose Money

Never lose money in the stock market again. Yeah, I... Read More

Investment Research - The Dalbar Study

Very few people, even professionals, have heard of the Dalbar... Read More

Long Term Investing

In his wonderful book, 'Multiple Streams of Income', best selling... Read More

The Elephant

Four blind men were asked to give a description of... Read More

Investing in Stocks and The Game of Monopoly

To begin, you might look at playing the stock market... Read More

Top 25 Growth Funds

On Monday, November 25, 2000 Investor's Business Daily listed on... Read More

Again With the Bubbles?

A few years back ? it seems like an eternity... Read More

Basics of Stock Market

Financial markets provide their participants with the most favorable conditions... Read More

Psychology ? How to Reduce Negative Thoughts Relating to Trading?

The thinking process of the brain relating to the... Read More

The Secret Art of Backtesting

If you have not back tested your trading system, you... Read More

Mousetrap

The spring-loaded rat catcher is the ultimate low-tech device invented... Read More

The Secret to More Winning Trades is as Simple as Avoiding This Common Mistake

If you're a normal human being, your need to feel... Read More

Bad News is Good News

For weeks, no, months we have been bombarded with nothing... Read More

Hedge Funds: the Good, the Bad, and the Ugly

Alfred Winslow Jones started hedge funds in 1949. He was... Read More

Mutual Funds: The Modern Den of Thieves!

Mutual funds were created with the idea that one person... Read More

8 Penny Stocks to Avoid

There are many good penny stock investments available, which could... Read More

Rebalance And Diversify

The stock market has not been very kind to your... Read More

The Exclusive Club of Large Caps

Picture one of those clubs where only the real heavyweights... Read More

Hedge Fund Advertising

Have you seen all those big full page ads for... Read More

Chart Reading

As an investor you will want to check out any... Read More