Buy and Hold

I should probably clarify my position on the "Buy and Hold" strategy. I don't like it as the best way to make money in the stock market. Buy, hold, and diversify is the mutual fund industry's catch phrase. They want you to put your money in their funds and forget about it. That's a bad idea.

On the other hand, a lot of people work very hard at their jobs and pay good money to have a professional handle their investments. Unfortunately, professionals these days aren't always so professional (ie. Madoff and Stanford). So what do you do?

I say that you have to know where your money is. I think I heard Derek Jeter say that was the piece of advice he was given by Warren Buffet. It doesn't matter if you paid a professional to invest your money for you or not. You have to be involved, even if it means giving up your own time. It will be time well spent.

Not to say that everyone has to be an investing expert. I'm not, but I strive to be. I like being in control of my own investments. Not everyone does. But it's your money. Nobody cares more about your money than you. Not because you're necessarily greedy or selfish, but because it represents what you want to do in the future. When you can retire, where you can go on vacation, etc. That mutual fund manager you invested with has a different set of priorities. Did I do better than the other mutual funds in my category? Did I attract more money to the fund? But, unfortunately not, did I make money for my investors?

I think you have to get involved. You don't have to trade for a living or even for a hobby. But you have to know what you own and why you own it. I think it'll be worth the time you spend on it.