[video] Quick Take: Beat the Index, Ignore Buy and Hold
NEW YORK (TheStreet) -- Is buy-and-hold still the golden strategy or is it no longer a method worth using? Nick Atkeson, author of Win By Not Losing, has a more tactical approach to investing, he told TheStreet's Gregg Greenberg.
Buy-and-hold is a fine strategy through some investment periods, he said, but over the long term it can have severely negative consequences for the investor.
His method mostly involves using simple moving averages and investor sentiment as "tells" on when to be long the market and when to be out of it. Through this method, investors would have been long all throughout 2013 -- and would still be long -- but would have been out of the market during the financial collapse in 2008, he said.
Over the past 140 years, the stock market tended to move higher for an extended period, followed by years of "choppy" action, he said. Through all of those times, investors can find opportunities to make money.He stressed it's important for investors to have some sort of protection or exit strategy. His insurance for protecting against losses is simple: Get out of equities when times are bad. Atkeson reminded investors that during the harsh selloff in 2008, it didn't matter what stock you owned because they were all getting hammered. His system is not about day trading, nor does it involve a lot of activity. It's mostly about following the trends and requires roughly three trades per year, Atkeson said. -- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell
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