Please ensure Javascript is enabled for purposes of website accessibility

Buy and Hold Is Dead. Long Live Buy and Hold!

By Motley Fool Staff - Updated Apr 6, 2017 at 1:53AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Your chance to chime in.

The rise of equity ownership in the United States, fed by the Internet, low-cost discount brokerages, and self-directed retirement vehicles like 401(k)s and IRAs, has brought along with it heightened expectations.

When SPDRs (NYSE:SPY) investors, hoping only to track the movement of the S&P 500 stock index, are losing money, as they have over the trailing 10 years (a far cry from earning the ballyhooed 10% average annual return), the wisdom is rightfully challenged.

Blue Chip

10-Year Return

Microsoft (NASDAQ:MSFT)

(42%)

General Electric (NYSE:GE)

(60%)

Coca-Cola (NYSE:KO)

(25%)

Disney (NYSE:DIS)

(13%)

Dow Chemical (NYSE:DOW)

(57%)

Data from Capital IQ, a division of Standard & Poor's.

As the table above demonstrates, even stalwarts have taken a bath over the past decade.

Granted, June 1999 was a frothy time for the market, but critics of the long-term buy and hold philosophy can point to three-month returns that blister 10-year returns:

Blue Chip

3-Month Return

Microsoft

33%

General Electric

59%

Coca-Cola

23%

Disney

52%

Dow Chemical

171%

Data from Capital IQ, a division of Standard & Poor's.

Many people are pointing to the recent volatility in the market and dismal 10-year returns and arguing that investing paradigms have shifted.   

For the next few weeks, investment experts and Fool advisors, analysts, and editors will be weighing in with their thoughts on the future of "buy and hold." But we also really want to hear from you. Answer the poll below, and let us know the reasons for your answer in the comments section at the bottom of this article!

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The Walt Disney Company Stock Quote
The Walt Disney Company
DIS
$105.83 (3.33%) $3.41
Microsoft Corporation Stock Quote
Microsoft Corporation
MSFT
$260.65 (3.20%) $8.09
The Coca-Cola Company Stock Quote
The Coca-Cola Company
KO
$62.86 (3.08%) $1.88
General Electric Company Stock Quote
General Electric Company
GE
$75.46 (0.28%) $0.21
DuPont de Nemours, Inc. Stock Quote
DuPont de Nemours, Inc.
DOW
SPDR S&P 500 ETF Trust Stock Quote
SPDR S&P 500 ETF Trust
SPY
$396.92 (1.87%) $7.29

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
330%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.