Rebel Capitalist News WARNING: Buy And Hold Will Destroy Most Investors (Here's Why)
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Aug 29, 2025 Delve into the critiques of the 'buy and hold' investment strategy, revealing historical market downturns that could catch investors off guard. Explore the importance of price-to-earnings ratios in assessing market performance, highlighting potential current overvaluations. Understand the concept of mean reversion, urging traders to move beyond simplistic strategies. Lastly, hear a cautionary tale about trading futures that underscores the necessity of grasping market dynamics to avoid costly mistakes.
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Questioning Buy-And-Hold Orthodoxy
- George Gammon challenges the buy-and-hold dogma by asking if it holds up empirically over long history.
- He emphasizes real (inflation-adjusted) returns matter more than nominal charts shown since 1980.
Japan's Bubble As A Cautionary Tale
- Gammon recounts a conversation with a hedge fund manager who began his career in Japan around 1988 to illustrate investor complacency.
- He shows how 1965–1990 Nikkei charts convinced investors buy-and-hold would always work, until the 1990s crash proved otherwise.
Starting Valuation Predicts Decade Outcomes
- Gammon shows PE ratios from 1930 onward and links starting-decade valuation to real decade returns.
- He finds decades that began with S&P PE >20 never finished higher in inflation-adjusted terms.