From Michael Gibbons:
“The S&P 500 (SPX) closed on 5/22/2000 at 1400.72 and closed on Friday 5/28/2010 at 1089.41. This is a 22.2% loss in value in ten years of buy and hold investing not allowing for inflation. This means a buy and hold investor has lost 22.2% of their money plus another 20% for inflation — a 42% haircut. It looks to me that a lot depends upon timing as to whether buy and hold is a viable investment strategy. For the past ten years, buy and hold has been a big loser as it has been in many other time periods in history. The period of history the buy and hold advocates don’t want you to know about is 1929 to 1954. The highest close for the Dow was 381.17 on 9/3/1929 before the beginning of the great bear market, and it took 25 years to get back to ‘even’ on a nominal basis (not counting inflation). The Dow closed above 381 for the first time on 11/23/1954 after the 9/3/1929 high.”
Mark Twain once said:
“A lie can travel halfway around the world while the truth is still putting on its shoes.”
The lie of buy and hold has traveled much farther than halfway around the world!