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Citigroup Has Some Terrible Advice for You

By Matt Koppenheffer and David Hanson - Apr 23, 2013 at 1:43PM

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Citigroup's advice to its brokerage clients is bad for customers, but its good for the bank.

Is buy-and-hold dead? E*TRADE (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 (C -0.87%) 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. 

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