Ep. 19 – Bill Sherman – Buy and Hold is Dead

Buy and Hold isn’t all it’s cracked up to be. You may have been told that you should buy and hold your stocks and that it’s the number one investment strategy. However, buy and hold is a passive investment strategy, which means you buy stocks and hold them for a long time regardless of market fluctuations. If the market crashes, there is nothing you can do about it.

Buy and hold is a very risky investment strategy that ignores volatility and market analysis. We reached out to Bill Sherman and asked him to share his professional opinion on whether buy and hold investing is a good idea.

Bill is a professional money manager who has directly managed over $600 million during his career. He has spent the majority of his professional life providing investment management services to money management firms, individual investment advisors, and brokers across the country. In this episode, we talk to Bill about his viewpoint on buy and hold and why he believes it is not always a worthwhile investment strategy.

In this episode find out:

• Where Bill grew up and how he found his way to money management
• The main flaw with asset allocation in buy and hold investing
• Why buy and hold is only beneficial if you are an institution with an infinite lifespan
• Why buy and hold investors believe that you can’t time the market and why this isn’t always the case
• How Bill and his team measure risk on a supply and demand basis
• Why it’s important to take evasive action when risk is high
• Why the essence of investment management is the management of risk, not the management of returns

Tweetable Quotes:

“Buy and hold is terrific… if you are an institution with an infinite lifespan”

“Those who don’t take any evasive action when risk is high, may not survive and definitely won’t thrive.”

Resources:

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