Why are dangerous for his retirement buying and holding

Copyright 2006 Equitrend, Inc.

When someone tells you that the dam is breaking, do you just stay there and get washed away by flooding? Why professional management industry gives this advice to manage your retirement? Why trillions of dollars being lost in Millennium bear market due to poor money management advice?

The latest research from a study carried out by three academics of the London Business School was recently reported in a great article from the Wall Street Journal titled "the long-term danger is undervalued," goes a long way toward debunking the myths of long-term investment. Professors Elroy Dimson and Paul Marsh and Mike Staunton dispel the notion of buy-and-hold, noting, "not only can the markets take a long time to recover, but also investors usually underestimate what is the safe period for long-term keep stocks."

How dangerous this myth Buy & Hold can be seen in another study completion, the who is who "of 16 major national stock markets, investors only five would have been guaranteed positive annual returns over each period of 20 years during the last century."

This is pretty impressive. Most people feel is a slam-dunk that they will win more than 20 years. Of course, this assumes that there's going to be a victim of another problem, which is the survival bias. It is quite possible that even if the market worked more than 20 years, the small number of stocks chosen might not, as most people who bought Internet stocks now can clearly see. The article also blew up one of the current myths. "You know, the market has been down for three years in a row, and therefore cannot refuse for a quarter", as positioned by many experts. Response of teachers that is: "the history of stock market performance shows that in 16 markets, the likelihood of a fourth in the year is 40%. That also happens to be the probability of any other year is a year down. "

The bear ate my retirement the Millennium the bear market will go down in the history books as one of the worst bear markets to date. For those of you who are young and have time on your side, you should be able to suffer over the years it takes to return to break-even point. If you're closer to retirement, their retirement plans probably have changed. There are many sad stories documented about people like you who have lost much of their retirement savings to the Millennium the bear market.

I can only plead with you to evaluate timing techniques tend to grow and protect your precious goods. Invest with, not against, the market and leave the math of a breakthrough and decline of the labour market in their favor.