Regarding my OWN version of Buy & Hold:
Market timing carries the burden of making dual decisions no investor in history has been able to pull off: When to dump (or how much) and when to reenter. Heck, Buffett got both wrong in 2020 with his airline stocks. I'm always struck by the arrogance or naivete of market timers. Most timers, I assume, suffer extreme swings between Greed and Fear and never learn that those natural emotions must be tamed for investment success.
Buffett didn't start out being "BUFFETT." Early on, he dabbled in shorting stocks and failed. Long before he and Munger had a $400 billion "cushion," Buffett was a regular young man with bills to pay, three kids to support, and a very goofy wife who eventually left him. Then he made some failed efforts to outsmart Mister Market. He concluded that being out of the market at a bottom was just about the worst disaster an investor could suffer. Unlike most IHUBers, Buffett learns!
Buffett's "hold forever" decision was undoubted driven my his mentor Professor Graham who suffered terrible business and personal losses during the Depression and came back.
Say you lose 80% in an enduring collapse. Unless calamity happens right after you start investing you'll be losing 80% from a portfolio that's grown and perhaps ballooned. If I had been more aggressive and hedged less with fixed income stuff, I'd probably have far more wealth. A permanent 80% market loss wouldn't affect me much (assuming Social Security survives).
That brings us to this by Peter Lynch:
“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.”
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