Warren Buffett is a buy-and-hold kind of guy, right?
warren buffett buy and hold cartoon
Well, not exactly.
He’s mostly known for his value investing (which is kind of buy and hold) strategies, but he’s done other difficult stuff like arbritrages. If you’re interested in his other techniques you may want to read “The Warren Buffett Way” buy Robert G. Hagstrom. There’s a section on arbritrage Warren Buffett carried.
That said, he is well known for his buy-and-hold strategy. He’s known to have said quotes like “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years. ” and “Our favorite holding period is forever. ”
I personally take the buy and hold strategy too. I work for one of the 5 big banks in Canada. They have a very nice employee profit sharing plan, in which you buy the company stock from your pay checque and the company will match 50% of your contribution, up to a certain portion. I don’t have time to play with the volaitility of the market, therefore do not day trade. Plus I cannot take the daily (or even minute by minute) price fluctuation. So I prefer buying and holding.
Is Buying and holding dead? This is a proverbial question these days (check out the article here at Motley Fool), kind of like “should I buy a Mac or PC”? I think there is no real answer to this question. If you like the volatility of the market and following the day-to-day fluctuation of the market, I think buy and hold is probably dead for you, but if you get stressed over that or have other activities to do during the day, buy and hold is not a bad thing at all.
So it comes down to knowing what you like.
Please share your investment strategies and what you like : )