Go Read

Barry Ritholtz is one of the deans of investment commentary.  A few days ago he wrote a timely article on "Why You Should Stick With Buy and Hold".  That gets harder for some folks to do when markets are choppy like they've been these last few months.  Often times investors have trouble keeping to their long-term strategy when things become uncertain and the gurus on TV are telling you the end is near. 

Anyway go read the article that I've linked above.  Here's my favorite quote from it below:

• Emotional management/discipline: Even the greatest trading strategy is worthless if you lack the discipline and emotional fortitude to stay with it. Wes Gray of Alpha Architect notes that even an omniscient God would get fired by his investors during market volatility’s severe drawdowns because they lack the discipline to stick with it.

The alternatives to buy and hold involve tasks that are beyond most individual investors and many professional ones. Instead, consider a globally diversified portfolio, including asset classes that are less correlated to equities: corporate bonds, Treasury inflation-protected securities, and Treasuries. A portfolio that is 60 percent equities and 40 percent fixed income should suffer drawdowns of about 26 percent to 28 percent in markets that get cut in half, such as 1973-74 or 2008-09. If you cannot live through a 25 percent pullback in the value of your portfolio, you have no business owning stocks.

As we keep reminding you, there is no free lunch — and that includes market timing and hedging strategies.

As a last note the 60/40 strategy he discusses above wouldn't have made you any money in October as both stocks and bonds were down on the month.  The decline in bonds had to do with the sudden rise in interest rates that occurred back then.  

Back Thursday and Friday this week.