Buy and Hold Is Dead – an easy System utilized by A Multi Millionaire Trader That Beats 95% of the pros

If you follow the advice of many financial professionals they will tell you that buying and holding quality shares over the long run is a sound investment. Whilst this may be true over 25 or 50 years, the last 10 years have been dead money for anyone tracking the markets. In fact cash on deposit would have produced better results with a lot less risk.

Let’s use the S&P500 which is still the world’s best benchmark to track as an example. If you had invested in November 1998, 10 years on you would be sitting at a loss.

So whilst Buy and Hold has not worked over the last decade we also know that most short term traders don’t make money. It’s a fact that most fund managers and hedge funds cannot beat the index over the long term.

Also getting in and out of markets although cheaper than in the past still costs money. Not just commission but the spread (difference between buying and selling price). Also active trading can affect your tax rates.

So what’s a good solution?

Here is a very simple trading system which keeps you in during the good periods and gets you out during the poor months and years.

This system requires no complicated software and will only need around 10 minutes per week to operate.

Using a Moving Average

This one tool has made me (and saved) more money than any other. It’s hard to trace the origins, however, one of the pioneers was Richard Donchian who was a great pioneer of systematic trading in the 1950′s and 60′s. The systems he created over 40 years ago are common place in today’s trading world and are the basis for many of the complex systems used by the world’s best traders.