Buy and Hold strategy passe?

[disneysteve]

Mutual funds (buy and hold) strategy has been proven to not work, especially with them dropped 40% to 60% last year.

What proof would that be exactly?

Just because many funds (not all, mind you) saw big drops in 2008 doesn't mean investing in mutual funds is a failed strategy. Many of those very same funds are up 30% or 40% or more in 2009. My best fund is up just over 70% YTD and over 116% for the year as of 11/6! If that is a failed strategy, I'm quite happy to be a failure.

[snafu]

Most people buy when everyone else is buying and the price has been driven too high. Likewise, they sell when everyone else is selling which is when you should be buying if you have researched and believe in the company and it's management.

Most Mutual Fund managers don't out perform the index in their own market. Yes, there are bubbles like the current gold market but you need to be nimble and get out when conditions change.

Buying the Bond market via mutual funds makes sense to me because I need all those other investors to participate in those really good firms. I can't keep up-to-date on international stock market[s] or political shenanigans so using a mutual fund whose managers are there - on the ground, keeps me mostly on the plus side.

I don't have enough money to buy enough shares with enough diversification to make a serious profit. Sometimes I'd like to write to the manager of my least favorite fund and ask ...'hey guy...what were you thinking!'

Lastly, just because an investor is 60 y/o doesn't mean they need to drop equities, they may need to rebalance or choose less volatile stocks but they do not cash out just because they reach some arbitrary age.

[saving peter]

I agree that 'Buy and Hold' is the way to go with the stock markets. The Stock Market definitey rewards patience, if you get your stock picks right and can bide your time. And, of course, that means no panic selling, and no Herd Mentality.