I get tons of emails with all kinds of questions about the markets. Like the one I have addressed in last week’s stock report: is it the top of the markets? I’ve answered that as best as I could by showing two simple examples from the past.

There is another question that I get from followers a lot: How about investing long-term? Now this one is pretty tricky to answer in my opinion. Let’s start with the market indexes overview.

We have markets’ nearly all-time highs trying to correct in the past few days and we have been going straight up since 2009. But let me ask you a question: how many stocks in the Dow Jones index are still in the index since 2009?

Well, I will be honest with you and will tell you that I don’t know, but you can go ahead and Google it. I can guarantee you that those holdings are not the same since the Dow bottoming in 2009. I assure you those are not all the same stocks.

DOW 30, S&P 500, Nasdaq, Russell 2000 are marketing tools for financial markets. Their job is to look good for the retail investor. So if there’s a stock that underperforms an index or drags it down it will be replaced with over-performing stock. So with that being said, the adage “markets are designed to go up” sounds like a bad joke doesn’t it?

With this quick overview of market indexes, I will start answering the question that traders from around the world keep asking me over and over again: What to invest in the long-term? Tech stocks? Is it a great idea long-term?

Remember Nokia and Blackberry? Phone makers. I used to have a Nokia 3310. An unbreakable phone and it seemed like this company would dominate the world at a certain point. And where is it now? I don’t know, to be honest. The same thing happened with the Blackberry brand. Remember this one?

There are examples like these in each and every sector. Stocks that did not catch up with reality or couldn’t compete with the rest of the market.

Look at mismanaged companies like GE, what kind of a haircut would you take if you got in, let’s say in 2017, to be more dramatic?

It happens every single day in markets. Companies become penny stocks or “go under”, new companies that are being created. It is the stock market’s “circle of life”.

Looking into the future: what will happen to insurance stocks once every single car is self-driving? We might have no accidents on the roads. What will they do to stay afloat? Are there planning for that?

And what will happen to oil prices if every car, truck, train, airplane, and ship is electric? No one knows. 

With that kind of perspective, the long-term also looks risky, doesn’t it?

Just to throw it in here, does anyone know where the majority of profits come from Buffett’s Berkshire Hathaway? Selling premiums against his positions.

With that last sentence, it seems like I have answered the original question.

Buy and hold times are over! Whether you like it or not. If you want your money to grow you need to stay on top of it and manage it. If you don’t know how to do it, it is time to learn because if you don’t, the educated guys will come for it.

---

Financial freedom is a journey

The Tackle Today series is brought to you by Tackle Trading.

Sign up now and gain unfettered access to all of the quality content and powerful Scouting Reports that our Pro Members enjoy for 15-days absolutely free with no strings attached and let us show you what your trading has been missing.

# Sign up now for a 15-DAY FREE TRIAL #

---

Legal Disclaimer

Tackle Trading LLC (“Tackle Trading”) is providing this website and any related materials, including newsletters, blog posts, videos, social media postings and any other communications (collectively, the “Materials”) on an “as-is” basis. This means that although Tackle Trading strives to make the information accurate, thorough and current, neither Tackle Trading nor the author(s) of the Materials or the moderators guarantee or warrant the Materials or accept liability for any damage, loss or expense arising from the use of the Materials, whether based in tort, contract, or otherwise. Tackle Trading is providing the Materials for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Examples that address specific assets, stocks, options or other financial instrument transactions are for illustrative purposes only and are not intended to represent specific trades or transactions that we have conducted. In fact, for the purpose of illustration, we may use examples that are different from or contrary to transactions we have conducted or positions we hold. Furthermore, this website and any information or training herein are not intended as a solicitation for any future relationship, business or otherwise, between the users and the moderators. No express or implied warranties are being made with respect to these services and products. By using the Materials, each user agrees to indemnify and hold Tackle Trading harmless from all losses, expenses and costs, including reasonable attorneys’ fees, arising out of or resulting from user’s use of the Materials. In no event shall Tackle Trading or the author(s) or moderators be liable for any direct, special, consequential or incidental damages arising out of or related to the Materials. If this limitation on damages is not enforceable in some states, the total amount of Tackle Trading’s liability to the user or others shall not exceed the amount paid by the user for such Materials.

All investing and trading in the securities market involves a high degree of risk. Any decisions to place trades in the financial markets, including trading in stocks, options or other financial instruments, is a personal decision that should only be made after conducting thorough independent research, including a personal risk and financial assessment, and prior consultation with the user’s investment, legal, tax and accounting advisers, to determine whether such trading or investment is appropriate for that user.