I recently did some some reporting on the debate over buy-and-hold investing vs. market timing. I’m mostly in the buy-and-hold camp. But here’s my biggest takeaway…
There are two basic sales pitches on Wall Street:
1. Stocks are always a good buy. So pay me 1.4% of your assets per year to put you in stocks.
2. Stocks are sometimes a good buy, sometimes not. Pay me 1.4% to tell you the time.
Which is right?
Neither. Stocks aren’t always a good buy, but timing is insanely difficult.
Your number one rule:
Don’t pay anything close to 1.4%. It’s likely to eat up much of your extra return even if the salesman turns out to be right.
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