Revenge of the Buy-and-Hold Nerds

Focus: MARKETS

Howard Gold Image Howard Gold Founder & President, GoldenEgg Investing

Cordaro, wealth manager at RegentAtlantic Capital in Chatham, NJ, says many of his clients are in this position. “Some are back to even, some are close enough to even,” he tells me.

“By and large they’re amazed, especially when you put it in perspective,” he continues. “A little more than a year ago, you thought the world was going to end. Now you’re back to even. That’s remarkable.”

Who can forget those days? For six months—from the fall of Lehman Brothers in September 2008 to the market’s bottom in March 2009—talk of another Great Depression was everywhere. Credit had dried up, and companies of all sizes were firing people first and asking questions later.

By March 9, 2009, the Standard & Poor’s 500 was trading near 667, having lost a sickening 57% from its October 2007 peak. The blue-chip Dow Jones Industrial Average was wheezing along at 6547.

But many investment gurus—I interviewed several—were expecting the market to tumble even more, to Dow 4500 and the 400s in the S&P. Others, lamenting a “lost decade” for stocks, urged investors to abandon buy and hold for more active trading—with their paid services, of course.

How’d that work out, guys?

A handful of people did call the market’s turn—Jim Stack of Stack Financial Management and Dan Sullivan of the Chartist were two who spotted it early.

 
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