The happy people are those who are producing something; the bored people are those who are consuming much and producing nothing.
FX Trading - Blackmont Stomps on Buy-and-Hold; Mixed Rate Decisions in Europe
Investment advisor at Blackmont Capital and friend of Currency Currents, Yves Lamoureux, made a few comments on trading strategy that we wanted to include in today's piece:
From Buy and Hold to Buy and Fold!
Have investors been snoozing during the recent drop? They are now hitting the sell button in panic. The constant reminder to buy and hold stocks for the long term and forget about volatility probably hit home as more than 10 years of returns are wiped out.
Investors will soon be diagnosed S.A.D . (stocks anxiety disorder) on any further drop of the market -- a new social phobia that can be best explained by an unreasonable desire to avoid stocks. New records of cash held in money markets and bonds will attest to that ... and of course massive margin unwinding (see chart below).
Even the best of breed of buy-and-snooze have profoundly suffered. I have always tried to bring this point home. You have to sell a stock in order to make money.
In a fast changing landscape, one decision large cap stocks may not be leaders in a carbon constrained economy. We love buying stocks but we prefer even more selling them.
Yves Lamoureux, Investment Advisor
Blackmont Capital Inc.