When Buy & Hold Becomes Buy & Hurt
Buy-and-hold sounds safe—until it’s not. Riding out every dip leaves you fully exposed to crashes, drawdowns, and years of missed opportunities. Some stocks never bounce back. Waiting it out can cost you more than you think—especially if you’re ignoring the signals to move.
Here's the Real Wall Street Math
Lose 50%, and you need a 100% gain just to break even—and that can take years, if it happens at all.
Major Drawdowns
A true "Buy and Hold" strategy means enduring every market crash. The S&P 500 has experienced drawdowns of over 50%. Holding through these periods can be financially and emotionally devastating.
Long Recovery Periods
After a major crash, it can take years—sometimes over a decade—for the market to return to its previous high. This "lost time" can severely impact long-term goals, especially for those near retirement.
The Emotional Toll
It's easy to say you'll "hold on" during a crash, but it's incredibly difficult to do in practice. Watching your life savings evaporate often leads to panic selling at the worst possible moment.
It's Not Truly Passive
A successful Buy and Hold strategy still requires rebalancing, tax management, and the discipline to continuously add new capital, even when the market is falling.
It Ignores Changing Conditions
The market leaders of one decade are often not the leaders of the next. A rigid Buy and Hold approach may leave you over-exposed to yesterday's winners instead of tomorrow's.
Concentration Risk
Over time, the winning stocks in a portfolio can grow to become a dangerously large percentage of the total, leaving you vulnerable if that single stock turns against you.
There's a Smarter Way to Invest.
Our tools are designed to directly compare your strategies against a buy-and-hold approach, helping you build a data-driven plan that can adapt to changing market conditions and manage risk more effectively.
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