Buy and Hold Investing - market going down now - who cares - not me

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I've been a buy and hold investor in index funds - the S&P and one tech index fund - for a very , very long time
it's not a sexy strategy, too boring for many - but fine for me
I'm now living off of savings and investments
I pay no or almost no capital gains taxes unless I sell which I almost never do
there's no buy anymore in my buy and hold strategy - it's all hold

the long term return is estimated at 10% per year - somewhat higher for the tech index fund - that won't impress anyone but -

I've bought and held these positions for decades - the heights to which they have soared is astonishing to me when I consider how comparatively little I have bought into them

the market has been going down now for a week or so

I could care less - I've been thru this dozens of times - there are no guarantees but so far it always comes back - the only thing that differs from drop to the next is how long it will take to recover

that's my story and I'm sticking to it

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Quote: lilredrooster

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I've been a buy and hold investor in index funds - the S&P and one tech index fund - for a very , very long time
it's not a sexy strategy, too boring for many - but fine for me
I'm now living off of savings and investments
I pay no or almost no capital gains taxes unless I sell which I almost never do
there's no buy anymore in my buy and hold strategy - it's all hold

the long term return is estimated at 10% per year - somewhat higher for the tech index fund - that won't impress anyone but -

I've bought and held these positions for decades - the heights to which they have soared is astonishing to me when I consider how comparatively little I have bought into them

the market has been going down now for a week or so

I could care less - I've been thru this dozens of times - there are no guarantees but so far it always comes back - the only thing that differs from drop to the next is how long it will take to recover

that's my story and I'm sticking to it

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Just curious, I am starting to plan my retirement and wondering where your income comes from if you are not selling anything? Dividends?

Quote: DRich

Just curious, I am starting to plan my retirement and wondering where your income comes from if you are not selling anything? Dividends?
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I forgot to mention s.s.
and years ago after the market had a very big year I made a large drawdown and was able to get comparatively high interest on a common bank account - that is what I live off of that my s.s. does not cover
so, I guess it's not 100% accurate to say it's been only buy and hold - I did make one large sale after retiring -
but the amount of that sale was made in the very next year - it only took one year to get back to where I was before the sale
as for dividends, I do have a small % in bond funds - for safety in case of a very large market drop - but I reinvest the dividends - they are not paid out to me directly
dividends from the stock funds are smallish - they are also reinvested

good luck with your retirement planning

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you should be getting about 2% per year from your stocks from dividends. I see you have them re-invested

somebody said there really is a golden goose: quarterly dividends

this is true in more than one way, the dividends are just as sweet as having something lay golden eggs. And it is so easy to kill that golden goose by selling off those stocks ... yet most retirees really can't live off the dividends, so we find ourselves in fact at least slowly killing off our magic egg layer

sounds like you aren't one of those, Rooster, good for you. You might check into getting those dividends in cash if you're retired, though. Mighty sweet

A buy and hold in something like AAPL, which I have held continuously for pushing twenty years now, blows away something like this. It didn't take any kind of genius to buy and hold stocks like MSFT, AAPL, AMZN, NFLX, GOOGL, CMG, TSLA, and others, but to not take advantage of those and instead plow it into the S&P 500 would take something other than genius.

What "they" want you to think is that buying a fund is better than buying individual stocks, but that's not true at all. You may create your own blend.

However, at least he did hold. Many bot into the sexy stocks and sold before the real miracles happened, or even lost money dumping in 2008.

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89% of fund managers fail to beat the market meaning the S&P 500 - see link

these are professional money managers who failed - they "created their own blend"

from the link - "78-97% of actively managed stock funds failed to beat the indexes they were benchmarked against over ten years"

so my investment in the S&P 500 beat 89% of professional money managers

not trying to say it's anything approaching genius but this was my logic

surely there are some few who beat the s&p by a large margin

I didn't want to spend the time and effort to do that and didn't have the confidence that I could do that

and so very many who tried that did not succeed

maybe I could have done it if I had been less risk averse

but I really don't care - I have way, way more than enough due to my decades long strategy - and I don't have an appetite for luxury items


https://stockanalysis.com/article/can-you-beat-the-market/

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When you have BILLIONS of dollars to put somewhere, therein lies the problem - you can't just maneuver in and out on a whim. Plus these stock brokers have an incentive to churn commissions.

An individual investor who didn't take advantage of the great runup in the individual stocks I mentioned, is not someone who should be lauded in any way. If your advice is that someone 20 years old should put all his money into what you did, I would say that is faulty advice, and in any case, this youngest generation is going to laugh at anyone who suggests that they do that, whether it is good advice or not!

On the other hand, buy and hold in general, is solid advice for most, because most traders lose money, especially day traders. The way I do it is to buy and hold and trade additional shares of the same. Best of both.

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your strategy assumes that investors will always be able to identify stocks that are so great they will never tumble to almost nothing

maybe you can, I'm not going to question it, but I believe many will fail trying

and one of the stocks you mentioned - CMG - do you really believe it is impossible for that stock to fall to nothing________?_________that people won't get tired of that food_______?

I used to eat it fairly often - not anymore - I got tired of it

or maybe you will be prescient enough to see the big drops before they happen and get out - IDK

in any case, I don't doubt that you are much more profitable as an investor than I am - but I doubt many others can match you

per the link more than 115 million in the U.S. owned mutual funds in 2023 -


https://www.ici.org/news-release/23-news-mutual-funds#:~:text=The%20survey%20also%20found%20that,owned%20mutual%20funds%20in%202023.

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Quote: MDawg

When you have BILLIONS of dollars to put somewhere, therein lies the problem - you can't just maneuver in and out on a whim. Plus these stock brokers have an incentive to churn commissions.
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Just as an example I know a guy who owns a hedge fund that he started initially as a means just to invest his own money after he sold a start up. His biggest investment for the fund was BABA, and towards the end of 2021, he was lamenting to me about how it was down to the 160s or so, and that he was losing a lot of money for himself and his clients. I advised him to just dump and put it all into AMZN, which would have gone down a lot too, but by now would be back up. Well now that BABA stock is and has been stuck in the 70s, probably all his clients are crying and up in arms, but he still has his oceanfront home in FL and fleet of Ferraris.

BABA is not a stock I ever owned a single share of, I never believed in it, always preferred AMZN.

But this guy not only believed in it but rode it all the way down, mostly because he was stuck and didn't know where to put all the money if he did pull out. If you imagine me, as a Mack truck buying a couple million dollars of a stock in a single trade, and needing to pull in and out of a lane, imagine billions of dollars and how hard it is to maneuver. That inability to maneuver easily is part of why fund managers cannot beat the S&P, not just because they are incompetent. Comparing one fund index in a vacuum to another doesn't necessarily present the entire picture as to why one outperforms the other.