BUY AND HOLD.

BUY AND HOLD. Burton Malkiel wrote an important book on the economics of the stock market, now in its 9th edition: A RANDOM WALK DOWN WALL STREET. (Annalisa commented on the randomness of the stock market here.) In today’s Wall Street Journal, Malkiel writes that investors should not try to time the market and that by his calculations investors who moved money in and out of equity mutual funds between 1995 and 2007 underperformed buy-and-hold investors by three percentage points. He urges younger investors who save regularly to continue to buy equities. He urges investors approaching retirement to rebalance their savings annually, and points out that, since equities are down and bonds are up, rebalancing will lead to purchasing more equities. He says this even though he predicts that “We will have a serious recession now.” Of course, as I have been pointing out, you need enough cash to live on before you can buy and hold.