84. The Buy-And-Hold Cult

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If you haven’t already heard of the ‘buy and hold’ strategy, then this is the episode for you. If you have, then this is certainly the episode for you. For a while now, we’ve discussed the advantages, and disadvantages, of buying stocks with a very long-term focus, as generally speaking, the market does well over time. If you had bought the index right before the Global Financial Crisis, for example, and held through the crash, then you would be well up on your initial investment (if you had bought the US).

From around 2008, we’ve seen a rise in the popularity of Exchange Traded Funds (ETFs), across the globe, as many people move their money from active management, into ETFs, which are a more passive investing approach. In some cases, they’ve done this thinking that, over time, no matter what happens, the market will always go up, and you will make money. Not all cases, but some. And this is what we discuss today.

One of our favourite investors, and finance commentators, is Jesse Felder. An ex-investment banker, and billion-dollar hedge fund manager, Jesse is well respected and has many strong opinions on the direction of the marker. In one of his recent interviews, he discusses what he as coined as ‘the buy and hold cult’. We give our two-cents on his comments.

In this episode you will learn:

  • What Jesse means by the term ‘buy-and-hold cult’
  • If you are part of the cult!
  • About Japan’s stock market recovery
  • Our opinions on passive investing

Stocks and resources discussed:

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