[thoughts] 'Buy and Hold' the way to go?

What Triggered?

 It was this post below that made me felt the need to write about the 'buy and hold" strategy blindly applied by so many retailers and  hyped up by the media!

 

2007 & 2017 Comparison

Based on what was said above, I did these:
-checked the prices, used STI-ETF as a baseline
-check out the dividend paid out
-calculated the simple changes without dividends and with dividends.

Actually what stunned me the most is to see how important were dividend to the returns of our portfolio. Even without re-investments, the inclusion of dividends cushioned price falls and in the cash of noble, changed the negative to a positive.

What it says

The end results suggest 3 things:
1) "Buy & hold" did not lead to a positive outcome
2) Confidence in "Blue Chips" were unfounded
3) Dividends were key in improving stocks performance.

My Thoughts

The strategy of "buy and hold" has been propagated as a half-truth. Many uneducated investors (financially educated i mean) had held on to it like a commandments to disastrous outcomes. This exercise established the basic consideration for long-term investment should include some weightage on dividend yield; and the requirement to exercise decisions to take profits when necessary.

This is indeed food for thought because the "buy and hold" strategy had become synonymous with investing. We also often hear people use Warren Buffett as the poster boy for such a strategy, and this is an oversimplification of things.

Investing and trading is simple but not simplistic.