Some New Lessons about Buy-and-Hold Investing

Nearly five years ago, and only a couple of years into the re-structuring of my investing mindset that was so desperately needed (I had been a stock investing failure before 2013), I wrote my first post devoted exclusively to the “buy-and-hold” method of investing.  Without much of a track record to that point other than a few emerging winners, it was more of a looking forward with excitement to what might be after a few more years of making this my main investing mindset and practice.

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Why Do Only a Few Investors Succeed?

Investing – in stocks, mutual funds, ETF’s, etc. – is much like anything else.  Out of the many who try it, only a few end up really doing well with it.  But why?  Shouldn’t anybody who bought Apple or Amazon or Starbucks or MasterCard or PayPal or [insert name of ginormous, highly successful company] stock back in the day (or even the past five years) have done well with it?

The funny thing with stock investing in particular is that those who experience the greatest success are defined not by what they do, but more by one certain thing that they DO NOT do.  Let me attempt to frame this in a riddle:

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A High Stock Price Doesn't Matter – Really?!?!

Recently, I decided to calculate the average buy-price of all the stocks that I currently own.  The average is $167.20 US.  The least I’ve ever paid for one share of stock (again, of my current holdings) is $25.85 and the most is $848.00.

I’ll be completely honest:  when I was a novice stock investor, if somebody had told me that they paid more than a few dollars for any one stock, I would have thought that they were absolutely stupid.  Why?  Because I assumed that they had no chance of having any of their stocks investments multiply in value, let alone double.  I assumed that most of the stock’s growth was behind it and that gains after no longer being a “penny” or small-cap stock would be marginal at best.

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Adventure or Ordeal? Depends Upon Your Perspective

If you were to do an online search for the top ten fears/phobias that people have, nearly every list contains two that relate to a similar thing.  One of the phobias is almost always near the top of the list and that is the fear of heights.  Usually not much farther down the list is the more specific fear of flying.  In other words, there’s something about human nature that has a fear of being too far off the ground.

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Taking the Emotion out of Investing

Even though this is a blog about stock investing, the principles in many of these posts relate and can translate to success in any form of investing in other areas of life:  education, relationships, and so on.  Really, what point is there to becoming a successful stock investor if you can’t also learn things that make the rest of your life better and of those around you?  Although stock investing can be fun and very rewarding once you learn about and understand it, which also involves getting over any myths and hang-ups you might have about it, there are far more important things to life!

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Learning to Become a Bored Investor

I’ll admit that I’m about to bare my investing soul about one of my last great remaining weaknesses as an investor:  impatience.  May you benefit from what I’m about to share.  I write this in the shadow of selling my position in Google (GOOGL, GOOG) a few weeks ago after 1 1/2 years of very little activity which, as I’ve mentioned in other posts, hardly qualifies as the minimum 3 to 5 years that a person should hold a stock for.  What happened?  It spiked over 25% within a week of me selling it.

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Some Crucial Lessons About Buy-and-Hold Investing

One mantra that everybody even remotely acquainted with investing has heard for many years now is “buy and hold”.  I first learned about it over 20 years ago, but I was too impatient to put into practice plus I didn’t have the right information.  Finally, after ‘seeing the light’ upon learning the right information, here are some things I’ve learned since putting it into practice.

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