Why Buying And Holding Is Dangerous To Your Retirement By John M. McClure Copyright 2006 Equitrend, Inc.
When someone tells you that the dam is breaking, do you just stand there and get washed away by the floodwaters? Why does the professional management industry give you that advice for managing your retirement? Why did trillions of dollars get lost in the millennium bear market due to the bad advice of passive money management?
The Latest Research
A study by three academics from the London Business School was recently reported in a great Wall Street Journal article titled "Long-Term Risk Is Underestimated," goes a long way toward debunking the myths of long- term investing. Professors Elroy Dimson, Paul Marsh, and Mike Staunton dispelled the buy-and-hold notion by observing, "not only can markets take a long time to recover, but also investors generally underestimate what the safe long-run period is to hold stocks."
Just how dangerous this Buy & Hold myth can be is seen in another finding of the study, which is that "out of 16 major national stock markets, investors from only five would have been guaranteed positive annual returns over every 20-year period during the past century."
That's pretty staggering. Most people feel it's a slam-dunk that they're going to win over 20 years. Of course, that presupposes they won't fall prey to another problem, which is survivor bias. It's quite possible that even if the market worked out over 20 years, the handful of stocks they picked might not, as most people who bought Internet stocks can now see clearly. The article also exploded one of the present-day myths. “You know, the market's been down three years in a row, and therefore it can't decline for a fourth”, as positioned by so many pundits. The professors' response to that is: "The history of stock market performance shows that across 16 markets, the probability of a fourth down year is 40%. That
also happens to be the probability of any other year being a down year."
The Bear Ate My Retirement
The millennium bear market will go down in the history books as one of the worst bear markets to date. For those of you who are young and have time on your side, you should be able to suffer through the years it takes to get back to break-even. If you are nearer to retirement, your retirement plans have probably been altered. There are many sad stories documented about people just like you who have lost much of their retirement savings to the millennium bear market.
I can only plead with you to evaluate trend timing techniques to grow and protect your precious assets. Invest with, and not against, the market and let the mathematics of an advancing and declining market work in your favor.
John M. McClure is CEO and President of EquiTrend Inc., a stock market timing system that averages 42% profits per year. Mr. McClure is also a Registered Investment Advisor and President of the National Association of Active Investment Managers.www.equitrend.com
Did you buy groceries this weekend? <!-- Begin check for Blog Icon -->
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<div class="field-item"><p><img src="/sites/projects.newsobserver.com/files/images/pricebooklogo.jpg" alt="" hspace="7" vspace="7" width="96" height="101" align="left" />Remember that the price book only works if people participate!</p><p>Please take some time to <a href="http://www.newsobserver.com/business/pricebook" target="_blank">enter your purchases</a> into the price book.</p><p>You will be helping others to save!</p></div>
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Stores and sustainable seafood... <!-- Begin check for Blog Icon -->
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<p>Greenpeace recently released a survey that ranked the country's largest grocery stores in terms of their seafood sustainability. Northeastern favorite Wegman's scored the highest. Others such as Whole Foods were not a surprise. North Carolina based Harris Teeter and Food Lion ranked No. 6 and 8, respectively.</p><p>But the shocker for me was Trader Joe's, which ranked toward the bottom of the list at No. 17.</p><p>Click Read More to see the top 20. </p> <div class="node-blog-teaser-footer">
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Today's coupons are up... <!-- Begin check for Blog Icon -->
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<div class="field-item"><p>Today there was only a P&G Brandsaver insert.</p><p>We'll see the return of Red Plum and Smart Source inserts next week.</p><p>As always, the new version of the database is available for download below... </p><br /><br /><b>Document(s):</b><br /><a href='http://projects.newsobserver.com/sites/projects.newsobserver.com/files/Find a Coupon 0705.xls'>Find a Coupon 0705.xls</a><br /></div>
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Win a $25 gas card at Galatea... <!-- Begin check for Blog Icon -->
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<div class="field-item"><p>The <a href="http://www.galateaboutique.com/" target="_blank">Galatea botique</a> in Raleigh's Seaboard Station has announced that it will be closed on Sundays during July and August.</p><p>However, a visit on a Monday this summer could turn into a particularly lucrative shopping trip. The store is running a promotion called Motoring Mondays during which it will give away a $25 gas card each week. The drawing will take place at 7 p.m. on each Monday until Labor Day.</p></div>
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<div class="field-item"><p>Happy Fourth of July, everyone!</p><p>Like most of you, I am taking the day off to celebrate with some patriotic festivities.</p><p>If you're going shopping, it's a good weekend to snag some deals on furniture, appliances, apparel and just about anything else. (If you find a good one, feel free to share...)</p><p>And if you want to view the N&O's list of July 4 events, it's on our Mom2Mom blog, and you can find it by <a href="http://www.trianglemom2mom.com/events/search?op0=OR&filter0=356&op1=contains&filter1=&filter2=now" target="_blank">clicking here</a>.</p></div>
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Show your support for #14... <!-- Begin check for Blog Icon -->
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<div class="field-item"><p>Office Depot is asking customers to submit their most unique photos showing support for the # 14 Office Depot/Old Spice Chevrolet Impala SS and driver Tony Stewart.</p><p>The grand prize pacakge comes from Hewlett-Packard, and includes an HP TouchSmart Desktop Computer, HP Mini Notebook computer, HP Photosmart Premium Fax All-in-One Printer, HP printer/photo ink packs and HP Premium Plus Photo Paper. Everyone who enters the "Show Us Your 14" online photo contest will receive an Office Depot coupon for 14 percent off their next qualifying purchase.</p><p>You can <a href="#/infield/showyour14/overview" target="_blank">find the contest here</a>... </p></div>
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Friday freebies... <!-- Begin check for Blog Icon -->
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<div class="field-item"><p>It's Friday, which means it's time for freebies!</p><p>*This is a great one... Tide is offering a $1.50 coupon on its new Tide Stain Release. Go to <a href="http://www.tide.com/en-US/tide-stain-release/index.jspx#/tide-stain-release/?utm_source=antares_standalone&utm_medium=tfcn&utm_campaign=antares" target="_blank">this Web site</a> and click the button to get the coupon. When you do, it will bring up a screen for P&G Everyday Solutions. Log in if you're registered, or register. And once you do, you get a new screen with a number of samples and coupons available, including Charmin wipes and Tampax. Be sure to answer all the questions in the drop down menus or the page won't take... </p><p>*I think I might have mentioned this one before, but there are Aveeno hair care samples <a href="http://www.aveeno.com/hair-care/free-samples" target="_blank">here</a>. </p><p>*And, not quite a freebie, but when you <a href="http://www.blizzardfanclub.com/join/" target="_blank">sign up</a> for the DQ Blizzard Fan Club, you get a coupon for a BOGO Blizzard deal...</p></div>
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Talk to your cashier... <!-- Begin check for Blog Icon -->
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<div class="field-item"><p>Last weekend I was at home in the Philadelphia area visiting my family. I am trying to convince my non-couponing sister to start clipping, so I went to the store with her, binder in tow.</p><p>In all, we saved about $28, and she was very impressed. But the funniest part was when we got to the register...</p><p>The cashier scanned her store card and then my sister declared, "We have a TON of coupons!" The cashier just smiled and said, "OK." I laughed out loud because I thought it was so funny (we actually didn't have that many coupons, at least by my standards). But it is a good reminder that you should actually talk to your cashier. Especially if you have a rain check to redeem or some other coupon that may be out of the norm, they really appreciate the heads up. Plus, most of them are super nice folks...</p></div>
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Got too much toothpaste? <!-- Begin check for Blog Icon -->
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<div class="field-item"><p>I've said it before and I'm saying it again: one of the greatest things about couponing is that you can then be generous to others. With things like toothpaste routinely FREE after coupon and/or rebate, there's really no reason to be stingy!</p><p>So if you have a glut of items clogging up your pantry or closet, here's a good opportunity to purge for a good cause. The BJ's clubs in Raleigh (6301 Plantation Drive) and Garner (255 Shenstone Blvd.) along with the USO of North Carolina are collecting items including toothpaste, toothbrushes, bar soap, protein snack bars, gum and lip balm through the end of July. Collection bins have been placed in both stores. After the drive, "welcome home" care packages will be assembled for troops. </p></div>
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Special hours this weekend... <!-- Begin check for Blog Icon -->
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<div class="field-item"><p>Remember that many of the area's malls and stores will hold special hours this weekend because of the July 4 holiday. When in doubt, it is always best to call ahead to make sure the mall or store is open.</p><p>Saturday seems to be the day when there are the most changes to normal hours of operation. For your convenience, here are a few: </p><p><strong>Cary Towne Center:</strong> 10 a.m. to 8 p.m.</p><p><strong>Crabtree Valley Mall:</strong> 10 a.m. to 7 p.m.</p><p><strong>Northgate Mall: </strong>10 a.m. to 6 p.m. </p><p><strong>Streets at Southpoint:</strong> 10 a.m. to 7 p.m. </p><p><strong>Triangle Town Center: </strong>10 a.m. to 6 p.m. </p></div>
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Deals on photo prints... <!-- Begin check for Blog Icon -->
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<div class="field-item"><p>Retailers continue to aggressively promote their one-hour photo services... I'd expect a few more deals in the sales fliers on Sunday with July 4 being such a big photo-taking holiday...</p><p>Through Saturday, July 11, Walgreens is <a href="http://email.walgreens.com/PS!eTDDWTodBpgFBgIAAAAGCgFICgg1MzM3OTg4NgoKMTQ4MzIyNDkxNQkAKhZJCgkzOTk0NTAyOTQF?" target="_blank">offering</a> 10-cent prints when you use the coupon code <strong>JULY4</strong>.</p></div>
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BOGO entrees at Rocky Top... <!-- Begin check for Blog Icon -->
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<div class="field-item"><p>Rocky Top Hospitality is offering BOGO entrees this weekend at its restaurants, which include Michael Dean's, Bogarts, Hi5, Red Room and the Twisted Fork. As with most BOGOs, the cheaper of the two items will be free.</p><p>The promotion is good today through Sunday. You will need the coupon below. That's a good deal, but do be aware of the fine print: "18% gratuity added to pre-discount total." </p><br /><br /><b>Document(s):</b><br /><a href='http://projects.newsobserver.com/sites/projects.newsobserver.com/files/RTH-July_Promo_Coupon.pdf'>RTH-July_Promo_Coupon.pdf</a><br /></div>
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Do you have a $25,000 recipe? <!-- Begin check for Blog Icon -->
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<div class="field-item"><p>If you have a favorite family recipe and it's good enough, it could win you $25,000 from French's.</p><p>You can check out the contest and make your entry on the <a href="http://www.frenchs.com/Contest/index.php?" target="_blank">Web site here</a>. </p></div>
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Freebie alert: Long John Silvers <!-- Begin check for Blog Icon -->
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<div class="field-item"><p>Nation's Restaurant News is <a href="http://www.nrn.com/FoodWatch.aspx?id=369266&utm_source=MagnetMail&utm_medium=email&utm_term=sstock@newsobserver.com&utm_content=NRN-News-NRNam-7-1-09&utm_campaign=July%201,%202009%20-%20Studies%20show%20waning%20optimism%20among%20restaurateurs" target="_blank">reporting</a> that Long John Silver stores will be giving away free Baja Fish Tacos (new product) until 2:30 p.m. on July 14. According to the story, the taco "consists of Long John Silver?s classic batter-dipped fish layered inside a soft flour tortilla mixed with "crunchy crumbles," lettuce and a special Baja sauce." Normally it retails for 99 cents.</p></div>
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Food Lion recalls instant dry milk... <!-- Begin check for Blog Icon -->
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<div class="field-item"><p>Food Lion has issued a recall due to possible salmonella contamination.</p><p>The affected product is Food Lion Instant Nonfat Dry Milk, SKU 35826-03577, 9.6 oz.</p><p>Consumers are being asked to return the product to the store for a full refund.</p><p>You can find information on Food Lion recalls <a href="http://www.foodlion.com/FoodSafety/recalls.asp " target="_blank">here</a>.</p></div>
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