Buy And Hold How To Perpetuate Your Investment Losses

A recent cartoon in my daily newspaper showed two guys sitting in a bar. One is saying to the other'I did learn something from my broker...how to diversify my investment , What Are The Pros And Cons Of The Stock Market losse'

While this struck me as funny, there is certainly an element of truth to it judging by the number of tragic e-mails and phone calls I have received over the past couple of years.

This was brought home , Term Life Insurance Buy Term And Invest The Difference even more so by a reader who responded with strong disagreement to one of my articles. I advocate a methodical, disciplined approach to investing , Exchange Traded Funds in no-load mutual funds. , Index Trading Weekly Update It keeps me invested during up markets , Basics Of Investment Planning and on the sidelines during down markets. , Bad Credit First Time Buyer You Can Still Get Approved For A Home Mortgage Loan It was exactly this approach that got me and my clients out of the market , Insurance Is Available For Pet Caretakers Sitters And Dog Walkers in October, 2000 and put us back in to take advantage of the April, 2003 upswing.

Judging from the read's e-mail it appears that he works for a major bank , Its Important To Get Out Of Debt and is adamant about Buy , Bad Credit 2Nd Mortgage Should You Get A Second Mortgage & Hold and Dollar Cost , Loan Sharks Averaging. Maybe it's the approach he has chosen and he doesn't like hearing that the emperor is wearing no clothes. Nothing personal, honestly, but I find it incomprehensible that anyone, after the bear market , Exchange Traded Funds and the financial , What Would Jesus Invest In disasters most people experienced, can even consider such theories. The results are just too black & white.

Here are his three main points:

1. "There is no real feasible way to know whether the market , What Would Jesus Invest In is going to be up or down and when exactly to invest. , International Business Finance

2. "The only logical way for an investor , 10 Money Saving Tips For Home Businesses to make money , Why Should I Even Bother To Buy A Life Insurance is through the buy , Basics Of Investment Planning and hold approach. This method is used by Warren Buffett and he has consistently beaten the best with an average annual return of 29%.

3. "Dollar cost , Fix Your Credit Report average helps to hedge against the ups and downs of the market; moreover, one should have been buying , What Is A Second Mortgage up stocks , Learn How To Lose And Risk Management during the last 3 years, though I do agree with your cashing out at in 2000. I do not wish to insult you, but that seems to me more luck than intuition."

It appears that the only thing that I can agree with him on is, as he says, there is no reasonable way to "know" whether the market , Bad Credit First Time Buyer You Can Still Get Approved For A Home Mortgage Loan is going to be up or down. However, this statement also underscores that he is not familiar with trend tracking methodologies and the idea that one does not need to "know" or "predict" in order to make profitable investment , Bad Credit First Time Buyer You Can Still Get Approved For A Home Mortgage Loan decisions.

I've put together the composite for my trend tracking index , Why Should I Even Bother To Buy A Life Insurance in the 80s and it has consistently served me and my clients well by getting us into and out of the markets , California Bad Credit Personal Loans Questions To Answer Before You Apply For A Hard Money Loan in a timely manner.

The reader cites Warren Buffett's success. , 4 Ways To Slash Your Mortgage Costs Sure, he is legendary, but remember that he made most of his fortune during one of the greatest bull markets. , How To Get Out Of Debt Fast Using Consolidation Services Online He is probably now considered beyond good and evil. But what about the numerous stories in the press over the past 3 years of the heavy losses he sustained in Coca Cola and other stocks, , California Bad Credit Personal Loans Questions To Answer Before You Apply For A Hard Money Loan by stubbornly holding on to this positions. When you have enough money , How To Get Out Of Debt invested in a wide range of holdings, you become almost bullet proof. Do you fit in that category?

Furthermore, Buffet has resources available that the investing , Stock Trading Its Pros And Cons public simply does not have. Saying that he is successful , Add Little Extra To Your Home only because of his buy , How To Find A Low Rate Student Loan and hold approach, and everyone following this technique will be too, is an oversimplification and does not factor in all the issues.

How many non-millionaires have enough spare capital , Why Should I Even Bother To Buy A Life Insurance to keep buying , What Are The Pros And Cons Of The Stock Market and holding and buying , 10 Money Saving Tips For Home Businesses some more while stocks , Ohio Auto Insurance Tips To Reduce Rates plummet? How long can they wait for the upswing when their cost-averaged holdings will start to show a profit? Do the math! Yes, the market , Affordable Health Insurance An Absolute Bargain will eventually turn up. But will it recover enough fast enough to reverse your losses in time to do you any real good? If you're 20, then maybe. If you're 60, who knows?

I have received countless e-mails and phone calls from individuals who have been led astray by brokers, financial , Insurance Is Available For Pet Caretakers Sitters And Dog Walkers planners and others using buy-and-hold and dollar cost , Option Trading For A Living 7 Tips For Success Part 1 averaging. Stories abound of retirees having to go back to work just because someone told them that "the market , Option Trading For A Living 7 Tips For Success Part 1 can't go any lower" or "let's dollar cost , 4 Ways To Slash Your Mortgage s average."

As for his last point, when I gave the signal to cash out on October 13, 2000, it had nothing to do with either luck or intuition. I had no clue how good of a call that would be; I simply let my indicators be my guide. They pointed to a sell, we considered, and then followed through based on our experience. We held true to our philosophy and kept our emotions, speculations, fears or greed out of the equation. This disciplined approach is what I advocate.

This year it has led us to buy , Debt Consolidation Benefits back into the market , New Concerns About Debt And The Uk Housing on 4/29/03. And my detailed analysis and evaluation of a range of funds , Credit Problems What You Can Do led us to select some of the best; my top fund , 4 Steps To Saving Money At Christmas Time being up some 50%.

So, not to be cynical, but to me dollar cost , Finding Government Debt Consolidation Programs averaging is just a way to spread the pain over a longer period of time and to cloud the obvious with the hope the market , Disputing Credit Reports What You Need To Know will turn around tomorrow. After all, it can't go any lower. Can it?

About The Author

Ulli Niemann is an investment , Bad Credit 2Nd Mortgage Should You Get A Second Mortgage advisor and has been writing about objective, methodical approaches to investing , International Business Finance for over 10 years. He eluded the bear market , 10 Money Saving Tips For Home Businesses of 2000 and has helped countless people make better investment , What Would Jesus Invest In decisions. To find out more about his approach and his FREE Newsletter, please visit: http://www.successful-investment.com; ulli@successful-investment.com