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Debunking the Buy-and-Hold Myth

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Debunking the Buy-and-Hold Myth

Debunking the Buy-and-Hold Myth

Our active management approach radically differs from the typical “buy-and-hold” strategies often used by investors. Buy-and-hold means
staying invested in the market at all times, theoretically achieving the same results as the market.

Investors are sometimes misled by very long-term graphs that “prove” the value of this investment strategy. In reality, charts containing 80 years or more of data are simply irrelevant since the typical investor has only 15 to 20 years to build their retirement nest egg. History shows us there have been many periods of that length when a buy-and-hold approach would have been quite disappointing—or worse.

With buy-and-hold, average stock market investors spend two-thirds of their time working to break even—trying to recover from the cyclical downturns. At Stadion, we believe the best way to break even is to avoid big losses in the first place.