This morning, I wrote a guest post on moneyning.com. While David is on vacation, I am taking over his blog for today with the first part of The Buy and Hold Trading Strategy. This is an analogy between a trading strategy and raising your child. You can read on moneyning the stage from the day of his birth until when you son starts to go to school. On my blog, I am presenting the last two stages: Being a teenager and becoming a grown adult.
Dealing with a teenager / Sometimes, you just want to get rid of your lazy stocks!
This is expected to be the worst part of your life as a parent. Things are not necessarily going your way and unexpected events happen without you seeing them coming. Your teen is going through ups and downs and changes a lot during this period. Sometimes, drastic measures need to be taken.
This is also the worst period for your stocks. The company has problem with their internal growth, goes through a strike or legal actions are taken against it. Everything seems to happen and you could not predict anything in advance. Your stock volatile and goes up or down for no reasons. Sometimes, management has to sell a division or cut down employees to put everything back on track.
You are proud of your teenager that became a man / The final result of the Buy and Hold Strategy
Your teen finally made it through college; he found a lovely girl and they moved into their apartment. He is starting a new job and is very appreciated by his friends. His girlfriend is even mentioning the magic word â€œbabyâ€ once in a while. Your son is now an adult with great values. You are now a fulfilled parent.
If you can make it through all these oops and keep your stock, your reward will be significant. Exceptional companies, when they are hold long enough, grant their investors with great yield. You are now a fulfilled investor 😉
Unfortunately, stocks are less predictable than children. For example, you can start with the teenager stage at the very beginning and it could be the case for the next ten years. While in other cases, your stock will skyrocket since the very first day and never stop. Being an investor with a buy and hold strategy is a tough job but also offer great rewards. As it is the case for your children, you never know what your stocks will turn into.
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