Read an article by Michael S. Rozeff today in which he describes his approach to investing. The article was called "The Opportunistic Investor ." He says that a year ago he published two articles on buying a diversified portfolio and holding it. That portfolio is down 34 percent. Better than most. He says he actually did not invest according to his advice in that column. Instead, he was in cash.
He goes on to say that buy and hold is not the right approach. And I think the reason might have to do with the notion of "Austrian Investing," though he does not use those words. Here is what he does say about buy and hold:
The problem with that approach was and is government. Government alters currency values, and this alters the value of different kinds of investments. Government creates booms and busts, and that alters investment values. The presence of government forces us to speculate.
Then he goes on to talk about how we need to find value and buy it, be it stocks, real estate, or even timber.
I am on the hunt for more information about Austrian Investing. They’ve been right about the economy, maybe they would be right about investing too.
Oh, and BTW: Mish does a pretty good destruction of Peter Schiff’s approach to Austrian Investing. Good read.