Buy and Hold Is Dead: How to Make Money and Control Risk in Any Market

Chapter 3. Brackish Investors and Their Impending Doom

Although it sounds ideal, many investors thought the comfort zone was an unobtainable ideology in 2008. When this book was written, life was anything but routine for most people. Declining stock prices, declining real estate prices, and very weak domestic and global economies burdened investors worldwide. Nothing was working, and investors were unsettled. Safety was nowhere, except in government bonds, of course. However, those provided virtually no return, so alternatives seemed limited at the same time. Economists had a hard time rationalizing the widespread stress on all asset classes, and investors had a hard time trusting the prognosticators during the meltdown. Everyone seemed to have an opinion, but no one seemed to have trustworthy answers.

Understandably, investors were nervous because the playing field had changed, and they were realizing that for the first time. The natural byproduct of this uncertainty was fear. Initially, at least, the economic environment in 2008 appeared to be out of line with traditional doctrine. However, after this chapter, those conditions might seem a little more normal than they did at that time. In fact, by all accounts, the meltdown in 2008 was exactly in line with expected and predictable trends.

2008 was a rough year, and investors were learning the hard way that buy and hold strategies fail in down markets. Investors were confused at times, but the Investment Rate provides answers. The ...