Timely Advice:
Holding for the Long Term Can Be Very Costly

Stocks that look invincible don’t always stay that way. If their earnings and sales fade, they may never come back after long, steep declines. If they do, it can take years or decades—time during which your money could be invested elsewhere profitably. Think about where many of the tech stocks of the late 1990s market boom are today. Are you still holding some of them in your portfolio?

What about those steady stocks that still pay dividends? Many of them too have sunk in recent markets. It doesn’t help that yields—the dividend as a percentage of the share price—have been declining for years. They averaged 5% two decades ago, but by early 2001 had sunk to an average of just 1.6%.

Remember that the leaders of one bull market never lead another. Holding for the long term can leave you holding a bag of losers.

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