The end of the stock market’s correction may be near.
That’s because I just received an email from a prominent money manager declaring that “buy and hold is dead.” Like the first robin of spring heralding warmer weather around the corner, emails such as this one are a contrarian signal that the tide is about to turn.
That’s because the relative popularities of market timing and buying-and-holding follow a fairly predictable cycle. Buying and holding will be at its most popular at market tops and least popular at bottoms. Just the reverse will be the case for market timing.
This cycle exists because investors are like the generals always fighting the last war. During bull markets investors learn that buying and holding is the most profitable course of action, and that every dip is a buying opportunity. They continue behaving this way even…
