I too long bought into the wall street advice to hold for the long term–rates of return were (until recently) proven to be 9 – 11% on average if you encompass a half century or so into your tracking.
However that advice may not be fully up to date any more. If it doesn’t include the roughly 45% decline from one year ago, then those figures are too high.
In addition, the averages were pulled up by the remarkable, and abnormal, stock market growth of the 80s and 90s, when the averages went up something like eight-fold, trough to peak.
With investors now about even with 10 years ago, one has to ask if America is entering a new slow growth era. We are hobbled by a growing deficit at all levels of government, a dollar only temporarily stronger, a deflationary era not unlike the 1930s, and an incoming administration that favors much more regulation and higher taxes.
It is hard to take a buy and hold position with these trends in place.
