Very important: Before you buy into the myth about stocks being a good long term investment- you need to do your homework. Go to my site and see what I say about the buy and hold myth, but today, let’s look at performance for the past ten years. The S&P 500 (SPX) closed on 5/22/2000 at 1400.72 and closed on Friday 5/21/2010 at 1087.69. This is a 22.3% loss in value not allowing for inflation. This means a buy and hold investor has lost 22.3% of their money plus another 20% for inflation- a 42% haircut. It looks to me that a lot depends upon timing as to whether buy and hold is a viable investment strategy. For the past ten years, buy and hold has been a big loser.
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