Does Buy-and-Hold Reduce Risk?

How do you reduce risk in your investment portfolio? Most people try to do so by diversifying their assets and avoiding stocks when fears are high. But new research indicates the best risk-reducing measure is to buy stocks — and hold them, Marketwatch’s Chuck Jaffe says.

The Trouble With Playing It ‘Safe’

Fear is an incredibly powerful emotion that often serves humans well when it comes to survival. But in the stock market, acting on fear can be dangerous, something Chuck Jaffe notes in a recent MarketWatch column. Jaffe highlights two recent studies showing how risk-averse investors are, even with the market teaching high after high. One found that Americans on average have nearly half of their portfolios in cash, and less than 20% in stocks. “The … problem is that investors are looking for portfolios that are devoid of risk, as if such a thing actually exists,” he says. “It doesn’t. […]

The Wrong Lesson Learned From The Financial Crisis

It’s been nearly five years since the financial crisis of 2008 hit, and MarketWatch’s Chuck Jaffe says investors have learned some lessons from the crisis — the wrong lessons. The primary ‘lesson’ many seem to have taken from the crisis, Jaffe says, is that stocks are too dangerous and should be avoided. “They didn’t invest in 2009 because the sting from ’08 was so fresh and they saw no quick turnaround,” Jaffe says. “In 2010, the fallout from the financial crisis was creating a debt emergency in the EuroZone, while 2011 saw concerns that the Federal Reserve was inflating a […]