From: System Prompt 
Newsgroups: uk.finance
Subject: Re: Buy-and-Hold : the best strategy?
Date: Sat, 26 Jul 2003 07:09:20 GMT

On Fri, 25 Jul 2003 11:08:23 +0100, "Doug Ramage"
 wrote:

>
>"JCE"  wrote in message
>news:6af0c6e9.0307250146.4d08200c@posting.google.com...
>> Recently I came across an article published
>> on the web regarding the equity market.
>> (http://www.arachnoid.com/stocks/index.html)
>> It claims that: (1) stock markets are generally
>> not predictable, and (2) a buy-and-hold approach
>> always outperforms any other trading strategy.
>> How plausible is the claim?
>
>Not as good as my "buy low, sell high" strategy.

Don't forget the sell high, buy low short strategy!  An investment
book I read gave an analogy that stocks can be like Animals in a
wooded valley;  The brilliant one's are hard to spot, but the sickly
one's have a flock of vultures flying overhead.

If you are going to buy & hold routine watch the long term Price to
Earnings ratio and compare it to the present (a clue that gave away
the internet stocks with their "burn ratio's").  Wait for the market
to deflate and then purchase solid stocks that pay consistent
dividends.  Dividends are key for your buy and hold strategy, stock
appreciation is best for gambling, err...  I meant day trading / cycle
trading.

Don't bank on more than 7-8% and you'll be pleasantly surprised.
Count on a consistent 18% and you might as well be buying Lotto
tickets.

Stephen.

(You might want to read up on the Dollar Cost Averaging approach,
might fit your temperament and approach).  Diversification also tends
to work well, the truly wealthy don't have more than 11% of their
assets tied up in their personal real estate.