Is buy-and-hold dead? E*TRADE (NASDAQ:ETFC) would like you to think so.
In a video on the brokerage's website, the company declares that "buy-and-protect" should be the new focus for investors. A recent post on Citigroup's (NYSE:C) blog echoed similar suggestions and advised to simply confine heavy trading to retirement accounts to avoid taxes. Why would these companies not promote a buy-and-hold strategy? Fees, of course!
The more investors churn over their portfolios, the more fees and commissions brokerage houses collect. Excessive trading can quickly eat away at returns.
In this video, Motley Fool analysts Matt Koppenheffer and David Hanson debate the merits of buy-and-hold and if these companies are wrong for promoting more trading.
David Hanson has no position in any stocks mentioned. Matt Koppenheffer owns shares of E*TRADE Financial. The Motley Fool owns shares of Citigroup. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.