I believe that Buy and Hold is the best option for most investors and is certainly better than not investing at all. But for the diligent investor there are far better options.

Mutual funds are the ones who have sold people on the concept of Buy and Hold because that is how they can collect the most fees.

The thing that really scares me is that those selling the Buy and Hold approach lead people to believe that an average annual returns of 8+% can be expected over the long term. This is such a half truth it is a lie. Market history reveals that success through Buy and Hold occurs only when you are lucky enough to hold during a prolonged period when the market does well. There have been three periods longer than 57 years when the US market has achieved no real growth at all after inflation.

The Buy and Hold investor thinks that they can’t lose over the long term but not many realize that the long term on the US market historically has been as long as 130 years!

See how the numbers stack up here – http://etfhq.com/blog/2010/02/19/buy-and-hold/