Eighteen Tenets of the New Buy-and-Hold

Here is a list of Rob Bennett/s eighteen tenets of the New Buy-and Hold investing paradigm. You can read more about this at his web site.

Rob Bennett's Web Site
Basics of The New Buy-and-Hold
The New Buy-and-Hold

1) The first tenet of The New Buy-and-Hold is that holding stocks for the long term is a good idea.

2) The second tenet of The New Buy-and-Hold is that stock prices are to a large extent predictable in the long term.

3) The third tenet of The New Buy-and-Hold is that the historical stock-return data provides valuable guidance for predicting long-term stock returns.

4) The fourth tenet of The New Buy and Hold is that judgment must be applied in making use of findings generated from analyses of the historical stock-return data.

5) The fifth tenet of The New Buy-and-Hold is that buy-and-hold investing strategies are not self-executing.

6) The sixth tenet of The New Buy-and-Hold is that it is not inconsistent to believe both in holding stocks for the long term and in engaging in long-term timing of stock purchases.

7) The seventh tenet of The New Buy-and-Hold is that there are potentially large gains to be earned from use of a long-term timing strategy.

8) The eighth tenet of The New Buy-and-Hold is that classical investing wisdom remains relevant today.

9) The ninth tenet of The New Buy-and-Hold is that holding stocks for the long-term is difficult.

10) The tenth tenet of The New Buy-and-Hold is that attempting a buy-and-hold strategy that fails can generate the worst of all possible investing outcomes.

11) The eleventh tenet of the New Buy-and-Hold is that there are many factors that affect whether a particular investor will be able to maintain his or her stock allocation through big price drops.

12) The twelfth tenet of The New Buy-and-Hold is that the power of an effectively carried out buy-and-hold strategy is great enough that most of those employing effective strategies should maintain modest stock allocations even at times of high valuation.

13) The thirteenth tenet of The New Buy-and-Hold is that it is not possible for any middle-class investor to take a purely long-term perspective on his or her investing success.

14) The fourteenth tenet of The New Buy-and-Hold is that successful stock investing requires an ability to in many circumstances ignore ways of processing information that have been proven helpful in many other endeavors.

15) The fifteenth tenet of The New Buy-and-Hold is that safe withdrawal rate analysis offers a powerful aid to overcoming the emotions that have caused most middle-class investors of the past to sell stocks at the worst possible times for doing so.

16) The sixteenth tenet of The New Buy-and-Hold is that a host of insights for pursuing effective buy-and-hold strategies can be developed through analysis of the historical stock-return data.

17) The seventeenth tenet of The New Buy-and-Hold is that there is no one optimal allocation that applies to all investors.

18) The eighteenth tenet of The New Buy-and-Hold is that the buy-and-hold concept is a relatively new one and not yet well understood.

Have fun.

John Walter Russell
December 25, 2005