Buy-and-Hold Investing Is Dead – and Here’s the Better Way to Win

By TradeSmith Editorial Staff

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It’s been the “go-to” strategy for savers, investors, and aspiring retirees.

I’m talking, of course, about “buy-and-hold” investing – that set-it-and-forget-it approach that was billed as the can’t-miss pathway to wealth.

And like the equally long-embraced 60/40 portfolio split, it’s dead.

Want proof?

Just look at the chart below, which tracks the stock price of Alphabet Inc. (GOOGL) over the last year:

That’s an 18% loss.

The folks who bought shares last April 14 can’t even think about making a profit until GOOGL shares climb back to around $130.

Just to break even, GOOGL would need to climb 22% higher.

It’s even more devastating for the investors who paid $148.93 per share for GOOGL on Nov. 19, 2021.

They need the Alphabet stock price to climb 39% higher to reach a break-even point.

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Lots of you can probably relate; retail investors’ portfolios were down an average of 30% last year, losing $350 billion.

With apologies to the old game show, this brings us to “The $350 Billion Question”: What should you do now?

Think about that first chart I shared a moment ago, where some investors paid $130.48 per share for GOOGL, meaning they’re down 18%.

Those investors might think of GOOGL as a “losing” stock right now. But that’s just one side of the story.

Because some investors paid $85.40 per share in November 2022, when Alphabet was down around its six-month low:

It’s a different story for those folks, since they’ve pocketed a 25% profit in less than six months — compared with their ailing counterparts who’ve got a hand-wringing 18% loss over the even-longer 12-month stretch.

The difference: their timing.

And given the uncertain, volatile conditions we’ll face in the months to come, this is a difference — a lesson — to remember: The biggest (and perhaps only) profits will go to the folks who know when to buy, when to sell, and how to keep repeating that process.

Like lather, rinse, repeat.

But if that sounds easier said than done, then it’s time to meet “Project An-E.”

Putting Artificial Intelligence Tools to Work for You

Instead of just holding a stock and waiting for things to get better, or sitting on the sidelines because you’re afraid to time an investment, what if you had an AI tool that alerted you to potential optimal times to enter and exit an investment?

Well, you don’t have to wonder for very long.

With incredible computing power and AI at our fingertips, our team embarked on the most important research project in our company’s history… one that could help you make much bigger stock market returns than you’re making now, while taking less risk.

We call this “Project An-E” (pronounced Annie).

We conducted Project An-E with a simple goal in mind…

To understand the “markers” telling us which stocks would go up, which ones would go down — and exactly when that would happen in both cases.

Depending on your initial investment, that alone could add hundreds of thousands of dollars to your nest egg in just a few months.

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Here’s a sneak peek of An-E at work.

The image below is a stock chart for the manufacturing company Vontier Corp. (VNT).

The red “X” is when An-E made a prediction of what was going to happen to the stock price in the near future, and the blue circles are the predicted returns:

So, how did An-E do?

Marked by the green line in the image below is the actual stock price movement of VNT, along with An-E’s predictions:

And as you can see, An-E’s predictions were strikingly accurate.

Even two months out, An-E was nearly spot-on.

Look at the rightmost circle. An-E said Vontier would go up 14.7%.

It went up 13.5%.

It’s not an exaggeration to say that this is a new edge most investors have been lacking.

If you hold on to stocks An-E says are primed to move higher, you could withstand volatility with confidence and earn better returns.

On the other hand, if you stay away from the stocks An-E says are poised to go down, you could avoid punishing losses.

Both of these outcomes could mean you’d no longer have to worry about not having enough money for retirement or outliving your nest egg.