Those of you who follow my presentations and what I write know I firmly believe a buy-and-hold strategy is bound to increase portfolio risk and provide disappointing returns.
This is particularly true if you happen to live in one of those market stretches when stocks go nowhere. These stretches include the periods 1929-1940, 1968-1982, and the current one 1997-2009.
The long term does not exist. Buy-and-hold is a concept that has been sold by people who do not understand financial history. Or, they try to make their life easier by finding an effortless way to invest.
We have been going through a period proving this point quite clearly. Investors have to adjust their portfolio according to an investment process fitting their personality and the time they are willing to devote to managing their money.
No one can forecast the demise of a Lehman Brothers as it happened last September. Yet, folding and leaving the table is the wrong approach to managing your money. Gradualism and adapting your holdings to the latest trends is one approach.
Our process is based on the idea that the business cycle affects the return of asset classes. When business grows slowly, we invest in sectors doing well during such times.
I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes. To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/. You can review The Peter Dag Portfolio, free of charge of course. You can also call me at 1-800-833-2782 to discuss your specific money management needs.
George Dagnino, PhD
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