| Long Term Investing, Is It Dead? |
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| Written by Shaun Rosenberg |
| Saturday, 13 March 2010 15:02 |
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The stock market is has sure had its share of ups and downs over the last few years. In fact over the last few years it doesn't seem like much has really happened. Does this mean that buy and hold is gone for good? Does it still work?
The stock market is has sure had its share of ups and downs over the last few years. In fact over the last few years it doesn't seem like much has really happened. Does this mean that buy and hold is gone for good? Does it still work? The answer is yes. Or at least there is no evidence to suggest that it doesn't. In fact all the evidence seems to still suggest that buying stock in a strong company and holding onto it for the long term is still a great way to invest, and here is why. 1. There Have Been Lots of Flat Times We want our time to be unique, when something bad happens we want to believe that it is just because our time is the end of bull markets. But in reality there have been plenty of times in the past were stocks have trended sideways or gone up and down for many years on end. Investors who have hung onto strong stocks for the long term have made money overall in the stock market in the past. And therefore are likely to do so in the future as well. 2. History is a Good Indicator Aside from buying at the top of the great depression, there was no other time where you could have bought stocks, hold them for 20 years, and not have a decent overall return. Even if you bought at the top right before the great depression you could have still made money if you had held onto it long enough. 3. Dividend Stocks If you do take a look at the long term charts of the major indexes you still do not see the whole story. Many stocks also pay out a consistent cash flow to their investors in the form of dividends. These can make stocks a better investment than CDs and Bonds even in flat markets. All and all the stock market has been a profitable place to invest money over the long term and the last few years haven't changed that. There is no way to tell for sure if the stock market will be a profitable place to buy and hold in the future, but history looks good. And in the end that is all we can really say. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. For more on the Dow Jones Industrial Average History and it's returns or for more information on how the stock market has done over the long term visit this Stock Market History chart page. |