Pro #4: An Alternative To “Buy and Hold”

December 20, 2012

“In poker, if you have a bad hand, you ‘fold.’ In investing, the commonly accepted philosophy is to ‘buy and hold,’ even during a bear market.  So which of the two is really gambling - poker or buy-and-hold investing?”

Brenda Wenning

When we first began working together in the summer of 2008, Brenda Wenning of Wenning Investments advised me to sell off my stocks and put my money into cash.  My advisor talked me out of it – and my portfolio still hasn’t fully recovered.

Many of her clients listened better than I did and saved money, as The Wall Street Journal reported.

Brenda began her career as a typical “buy and hold” investment manager.  Using this approach, advisors buy assets and hold on to them long term, since it’s impossible to time the market and predict accurately what will happen to an investment.  But after watching her clients take big losses during the bear market at the beginning of the millennium, she determined that there had to be a better way of managing money and she converted to active investment management.

She has since become a board member at the National Association of Active Investment Managers.  The quote above comes from an article we worked on that explains how active investment management works.  You may also want to visit Brenda’s blog, “Wenning Advice.”

 

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