You have writien a good article but the title is misleading.
Yout hypothesis is that buy and hold investing is valid in most markets. You then describe an investment process that is definitely not buy and hold. Specifically, you limit downside by using standing stop-loss orders. If you are selling (stopped out) you are not holding!
That said, your investment process is sound and similar to one that I use. One note: instead of adjusting stop losses quarterly, you can use a trailing stop loss with a wider margin to take advantage of sudden moves-up. You suggest 10-15% stop loss; with trailing stop loss that should be widened, to say 15-20% to reduce whip-lash losses. If the primary purpose of the portfolio is dividend income, stop losses can be even wider, say up to 25%.
Is Buy-and-Hold Dead? Hardly [View article]
You have writien a good article but the title is misleading.
Yout hypothesis is that buy and hold investing is valid in most markets. You then describe an investment process that is definitely not buy and hold.
Specifically, you limit downside by using standing stop-loss orders. If you are selling (stopped out) you are not holding!
That said, your investment process is sound and similar to one that I use. One note: instead of adjusting stop losses quarterly, you can use a trailing stop loss with a wider margin to take advantage of sudden moves-up. You suggest 10-15% stop loss; with trailing stop loss that should be widened, to say 15-20% to reduce whip-lash losses. If the primary purpose of the portfolio is dividend income, stop losses can be even wider, say up to 25%.