Nobel-winning economist Harry Markowitz is famous for his work on modern portfolio theory, and is sometimes thought to advocate buy and hold.
In reality, he stated in a Chicago Tribune interview that he's "never been a buy and hold guy".
Markowitz said that, early in his career, he didn't take the level of risks that today's investment advisers suggest for young investors. He simply saved regularly and saved 1/2 his money in stocks, and 1/2 in bonds.
He kept asset allocation really simple. He never sold anything to regularly rebalance. When he felt that one category was higher, he stopped contributing to it.
At 82, he has a large municipal bond portfolio so that, if he dies, his wife can live off the interest.
Tuesday, 7 December 2010
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