Almost every investor knows how it used to work. At big brokerages and storefront adviser offices, financial pros taught their clients the mantra "Buy and hold." Stocks and other assets performed best, they argued, when investors picked good ones and left them alone for years, riding the markets' ups and downs while their portfolios thrived. And certainly, there was proof of its success: Warren Buffett, for one, grew incomparably rich owning companies for darn near forever.
And then it stopped working. The crash of 2008 wiped out at least $2.2 trillion in investor wealth, and investors who didn't adjust their strategies have found themselves regretting it, falling behind even after the recent rebound. For Rob Hoxton, who began his career as an adviser in West Virginia in the early 1990s, seeing the long-haul approach fail was an existential shock -- "like finding out your dad is really a woman," he says.
Read Full Article »