Buy and hold

Invest with a purpose. I generally buy in with a predetermined point I'm going to sell at, of course if something fundamentally changes I alter my strategy. The most important advice I can offer is never sell on negative emotion,especially on a day when stocks are tanking. I've bought on many of these days and made a mint.

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shite, personally I would have missed this entire rally if I didn't have a bunch of index funds.

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And investors who have been holding for the past 2 years are still not back to even, unless they've been averaging down (or are in a bunch of dividend-paying stocks), which the average Joe with an account at Edward Jones has not been doing. And now they've missed out on what is nearing a 100% return on the Dow Jones. I can just hear the financial advisor at Edward Jones or some other joint, "Mr. Smith, I have some great news for you. Your account is almost back to where it was 2 years ago!" In other words, "The market has nearly doubled since last March and you have not made a single penny!"

Whatever your finance professor tells you (most of them) ... do the opposite if you want to become wealthy from the stock market. There are doctors who smoke. There are lawyers who break the law. There are accountants who are in debt. There are finance professors who know a lot about the science but very little about the ins-and-outs of becoming a successful stock market investor.

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Why hold dips? Why take two steps forward and one step backward over and over again? Why not take two steps forward, pause, and then wait until it's time for you to take another two steps forward. Buy and hold investing is a product of the pre-Internet, pre-online trading account investor of the 80s and earlier. When it would cost you 500 to execute a trade and the process required long, drawn out phone calls to guys in New York on the stock exchanges, yeah buy and hold may have been the way to go. But that type of investing is quickly going the way of the dinosaur when it comes to individual investors.

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Some on this board might have held some securities or funds for 15-20 years and have large embedded capital gains. I think many have a portion of their equity holdings as long term buy and hold due to gains and/or increasing dividend streams, and tactically allocate the other risk taking portion of the portfolio based upon current valuations and market events. In tax advantaged accounts I have no qualms about taking gains, in taxable it could be a different story. That's what I do and why I don't adhere 100% to the financial planning mantra of holding all fixed income in tax advantaged accounts, that's what muni's are for and it relieves a lot of tax record keeping. To each his own.

Tax consequences are another reason to buy and hold. You are correct. I mean there are reasons to do it. My post was assuming the OP was not referring to holding when it is obviously more advantageous to hold for reasons other than the underlying security's price performance.

Doesn't actually matter man, it's not moving right now anyway

Here are the links to the charts. I went ahead and posted them to ihub so that you can view them live in the coming days. A couple things:

1. I had to go way back on RDN to find resistance, so in order for the chart not to appear too crowded, I used a monthly chart. By virtue of that, plays based off of that chart should be based w/ a longer-term hold in mind (i.e. a month or so at least). RDN DID make a nice breakout last month but I DO think it is a bit toppy as it is somewhat oversold on the monthly chart, oversold on the weekly chart, and very oversold on the daily chart. It could make a nice run still, but be aware that a pull back could likely first be in order.

2. In my opinion, investors who are buying the big boards right now should keep in mind that even though the individual security you're interested in may look good, the market as a whole is (again, in my opinion) becoming toppy and is due for a pull back. Such an occurrence would likely have a detrimental effect on many of the big board stocks, which could include F and RDN. Because MSEH is listed only on the OTCBB, a downturn by the general market would probably have little effect on its price action, if any.

F

MSEH

RDN

Glad you find the charts useful.

I'm a law student but will soon be applying to business school. It took the law to make me realize that my first love is finance. I studied it throughout college in my own time and have been investing for about 5 years now. But the field I would like to go into will be able to put both areas of study to use. I don't like to give stock tips on TD as it often comes off as a solicitation, but I'll make an exception.

Right now, I'm really liking LPIH. You can see some of my comments regarding it here:

LINK

and here:

LINK

The skinny is that they recently released guidance for FY 2011 of .65 on the low end (if warrants are fully exercised) and .75 on the high end. It's assumed by the company that all of its warrants will not be exercised, so I'll just call it .70. They closed Friday's session at 2.57, thus they have a Forward P/E of 3.67.

Here's the kicker: they've recently announced that they are submitting their application to be listed on the AMEX. They meet the requirements so issuance should take place over the next 120 days or so. Once we are uplisted to the AMEX, I think we will be given a P/E value that reflects that status. The Industry Avg. for Oil & Energy companies listed on the Nasdaq, NYSE, & AMEX exchanges is 27.5 w/ the outliers ranging from 12.5 to 42.3. Let's just say the market rewards our new little startup on the block with a P/E of only 10 ... w/ an EPS of .70, that still gives us a fair market value of $7.00.

I think LPIH is good for a bagger at minimum this year, with a lot of that price appreciation to be realized over the next three months once the AMEX uplist takes effect and once FY'11 begins (which for them is on July 1 of this year). Also, Chinese small caps have been on a tear and are expected to continue to do so given China's rapid growth. Even more so, the tremendous growth of the automobile industry in China will fare well for oil distributors. So we've got a trifecta here: we're in the right market, in the right industry, and in what I think is the right stock. And this is all without me even getting into the fact that the company has basically been granted a monopoly by the PRC.

I've been holding LPIH since 2.12 and have yet to sell a share, although I may begin to scrape a little bit off the top if it doesn't hold 2.50. I will still keep the large majority of my position.

I'm also heavily invested in JOEZ and TNDM. I like CLWR. Leave me your email and I'll send you some info on JOEZ and TNDM. I'm still DD'ing CLWR.

Everything else I'm trading. These are the only ones I'm willing to hold at this point in time. I'm staying away from large-caps right now with the exception of a quick trade.

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Seems to be the general consensus around here that this is stupid

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Nope, I'm a buy and holder myself. I think reliably beating any market (financial or otherwise) depends on being able to exploit some sort of inefficiency, informational or otherwise. In the financial markets, such ineffiencies are fleeting and essentially impossible to follow. This isn't to say it's impossible to make money, in fact one *should* at least stay even with inflation.

The big problem with active trading to me is not that you can't make money, but that you aren't properly compensated for the amount of risk taken and the time you personally spend on it. The price of risk is also very actively traded by the way, albeit by major financial institutions, but I haven't heard of any active individual traders actually compare their returns against that price. I bet the comparison is not favorable.

As it happens I know someone who is an active day trader, and he's been doing it for five years now so he's been reasonably successful at it. And over the five years his returns are slightly higher. However, he has had a couple of moments where he was seriously worried he would lose everything, I have not. Not only that, but his "edge" amounts to less than $10K a year, which means he is getting paid very poorly for his time.

All the above goes out the window in some nonfinancial markets where one might indeed have a real edge. Local businesses and/or real estate come to mind. But in the financial markets I really do think the way to go is to diversify across the larger asset classes and larger countries, and spend the extra time posting on TD.

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Why hold dips?

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The quick answer is how do you know it's a dip until afterwards?

Warren Buffett says his favorite holding period is "forever."

That's one of the reasons I'm never completely out of the market. I've got some shares I've owned for more than 25 years.

traders vs investors

different mindset