The market is often down, more often than not. Buy and hold is subject to start and end dates. If accumulated over time (saving during working years), then that will average things out. Lump sum in and out at the wrong times and the total rewards can be poor. Lump in and out at the best times and the rewards will tend to be great. Everyone ultimately is a lump sum investor, you have the option to sell all your stock today and lump sum it all back in tomorrow ... or degrees of proportions/percents anywhere between 0% and 100%. B&H investors are just investors who prefer to be fully lumped into the market every day.
Much will depend upon how much your 'cash' lags 'stocks'. One way to really improve your odds is to use something like a Permanent Portfolio, All-Weather, or even just a three way equal split of stock/cash/gold for the 'cash' holdings. There's not a sea of difference between 50/50 stock/cash and 33/67 and if the 67 'cash' is a equal split of stock/gold/cash that nets a overall asset allocation of 55/23/22 stock/cash/gold. Is that better than buy and hold? Depends upon what time period you measure/compare. But generally you'll see less deep down years, reasonably good up years. Along the lines of 50/50 having half the yearly downside, two thirds of the upside. For 33/67 that improves further
50/50 is a bit like asking whether you'd prefer half the downside, two thirds of the upside, or go with the full exposure/volatility. 33/67 has even less of the downside, a reasonably good chunk of the upside (as more stock was bought/added during the prior decline).
Some very long periods of lump summing at the worst possible time (high start date valuation, low end date valuation) and/or sequence of returns (withdrawing a safe withdrawal rate when total rewards might barely just pace inflation for a decade is paramount to drawing down the portfolio) - can result in some pretty bad outcomes. Buy and hold will endure such periods, as its no different to having lumped in/out across those dates. That's the reason why stocks reward more 'ON AVERAGE' as at other times they have to make up for those 'losses' and when you average all of that out it yields a higher 'average' figure - but where most investors don't actually achieve the 'average' but instead lag it. It's also common for investors to add in a additional 2%/year lag factor by poor behaviour, buying high, selling low - and that's a average figure, some individuals lag by considerably more.
Averaging will help average your rewards more towards middle-road. Avoid the worst case outcomes, but equally avoid having achieved the best outcomes. Neither best, nor worst. Or you can take your lump sum buy and hold chances and hope for the best (but potentially encounter the worst).
Given rewards as per the above link of do you prefer the first (buy and hold 100% stock) or the second (that averaged 67% 'cash'). And that's before the 'cash' might be more productively 'borrowed' and worked elsewhere (deployed to buy 'stock' in another AIM). Most would opt for that second choice. It's also less prone to capitulation. Many 100% stock investors bought in after recent good gains, sell out and move to 'another' asset allocation after losses. When you already hold a bunch of other assets alongside some stock you're less inclined to capitulate and be burdened with that average 2%/year annualised lower rewards. And their loss is anothers gain (opposite side). AIM users tend to provide liquidity to/buy stock from the scared, and are happy to supply stock to the greedy.
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