After writing about why the "buy and hold is dead" crowd is dead wrong, Morningstar's John Rekenthaler
explains why buy-and-hold is right. Rekenthaler says that rebellion against the concept was understandable in 1999 when stock valuations were sky-high but in the aftermath of the market crash, when fear was palpable, it was downright batty.
Arguing for buy-and-hold doesn't mean arguing for fixed portfolio allocation, however, Rekenthaler writes. The case for fixed portfolio allocation is mixed, because the industry may be "littered with the corpses of stock-market timers" but plenty of successful funds vary asset allocations over time. Rekenthaler promises to provide a more in-depth analysis at a later date.
Rekenthaler writes that the best buy opportunities seem to come from assets that are relatively cheap by one or more price measures, has had poor performance over the past several years and is unpopular with investors.
Speaking of buy candidates, Rekenthaler writes that the "bloom is off the roses" in emerging markets, which Rekenthaler finds pleasantly discouraging, but he isn't fully convinced that it's worth making a trade.
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