Buy and Hold Investing Vs Market Timing – It All Depends on the Right Stock Picking

Does buy and hold work in the present markets? Many market timers tout that they were able to exit the market successfully before a crash and lateron re-enter at a much lower price to increase their overall returns. This may be easier said than done.

Research shows that for market timers to perform better than the buy and hold investors, timers need to be accurate in more than 70% of their calls to enter and exit the market. The growth of newsletter forecasting future market movements and how to time them is on the rise as more and more investors enter the stock market hoping to double or triple their investments in a short period of time. However a clairvoyant with 100% accuracy in forecasting the markets is yet to emerge.

Until such times, the odds are stacked against the timers. Markets still seem to favor the buy and hold investor. The most famous buy and hold investor is Warren Buffet. He has been consistent in his investment style over the years. In fact he has been a value investor over the past few decades. He is a perfect follower of Benjamin Graham’s famous book,” The Intelligent Investor.”

Now whatever style of investment you choose, you will have to pick the right stocks if you want to succeed and make a good return. How to do stock picking? This is the million dollar question. The person who can do it right will always make a fortune whether their is a bull market or a bear market.