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Buy and Hold Investing Is Not Dead


NEW YORK ( TheStreet) -- The more I consider their mantra, the more I think some people who consider buy-and-hold investing "dead" simply aren't very good stock pickers. Or position managers.

At first blush, I was going to say Sure, just putting your money in an index wouldn't have worked all that well, but that's not true either. Consider the performance of the Nasdaq and S&P 500, as represented by the PowerShares QQQ (QQQ) and SPDR S&P 500 (SPY), over the last decade.

QQQ Chart QQQ data by YCharts

And imagine if you regularly added to a position in the Qs or SPY and/or bought more on dips, corrections and crashes.

But we'll set aside the irrelevance of stock picking when you can just buy an index and do quite alright for yourself in the stock market, at least historically speaking. Most people make this more complicated than it is. If you're not going to buy index funds or, if they just don't perform all that well, it absolutely comes down to stock picking.

I started thinking along these lines when I saw that, seemingly out of nowhere, Wendy's (WEN) is almost an $8 stock.

My biggest problem -- back when I could own individual stocks (As an employee of TheStreet (TST), company policy prohibits me from owning individual stocks other than TST) -- was not adhering to a buy-and-hold philosophy.

Wendy's might be the best example.

In April of 2012, I wrote about the company as a freelancer for TheStreet. Comparing Wendy's to Domino's Pizza (DPZ), I predicted Wendy's May Be the Next Big Turnaround Story. While I would hardly call the turnaround complete, if you bought WEN at the beginning of 2012 -- like I did -- you're sitting pretty today. The stock is up approximately 41% since then.

Now might be the time to take some profits. Not when I did. I could lie and say I sold because I had to ahead of full-time employment at TheStreet. Not so. I sold long before I became full-time, basically breaking even on the transaction.

I made money on DPZ, but also sold that one way too early.

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