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Finance Articles
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Buy and Hold Investment Philosophy
By Al Thomas
Debt Solutions It feels like your debts are spiraling out of control. With each passing month you are robbing Peter to pay Paul and the heavy cloud of debt is always hovering above your head. When you sit down to work out your money the simple truth is you have more going out than you have coming in. If this carries on there`s a real chance that you won`t be able to make the mortgage payments a few months down the line and then goodness knows what you are going to do. It`d be wonderful if you could pay a fixed monthly fee that would be affordable and keep your creditors off your back. There`s a good chance this can happen if you have a chat with a company that can provide a number of Debt Solutions. A debt management plan is just one of the options that the Debt Solutionscompany can provide. The scheme calculates what you can afford to pay each month and this sum is paid to the Debt Solutionsfirm. All it could take is one phone call to a trained advisor and you could be offered suitable solutions that will lift the burden of heavy debt from your shoulders.
Most brokers have not learned their trade - investing. Webster says that means putting money into something (stocks) for the purpose of obtaining an income or profit. When people look at their brokerage statements these days they must wonder where their broker went to school. Investors could have done better with a dartboard. Brokers are not taught to make money. They are taught all the regulations that come out of Washington that must be followed so the brokerage company will not be sued. To my knowledge none of them are taught the basic fundamentals of increasing customers` wealth or protecting the customers` capital from loss. Brokerage houses hire people to do reports about companies. They call them analysts, but today those jobs have deteriorated into snow jobs to get people to buy stock in a particular company. When you read the report you will find it very professionally done with pretty pictures and graphs and charts. Wow! I`ll buy that. And a few months later you will wish you hadn`t. When you have a loss the standard reply is, "Don`t worry. You are in for the long haul. The market always comes back". In your lifetime? Today there are hundreds of stocks that have lost 50% to 90% of their value and there is absolutely no hope they will ever recover those losses. But?.you are in for the long haul. You now have the Buy and Hold philosophy. Why do so many people cling to this doctrine? You have a stock you bought for $40 per share that went up to some profitable number and now is down below $10/share. You`re out 75% of your money. You are waiting for it to go back up so you can get out "even" and I will tell you "even" is a loser. Many years ago I heard a story about how they used to catch monkeys in Africa. A hole was made just big enough for the monkey to get his outstretched hand in a hollowed out coconut shell. Fruit and sweets were placed inside. The monkey put his hand in and gripped the goodies, but could not remove his clinched fist. It refused to let go even when the hunter came to put him in a cage. All the monkey had to do was let go of the candy and he could have escaped. Many investors are the same way about the stock they bought. They won`t let go. The investor does not want to admit he was wrong. You are not wrong until you sell - just broke. Small losses will not hurt you, but holding on can put you in the poverty cage. Buy and Hold conventional wisdom will break you. Learn to let go of the losers quickly and you will preserve your capital. 
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