How to make sense of contradictory investment advice

Jan 10 16:01 2020 Print This Article

Q. Several investment sources are giving advice that seems contradictory. On the one hand, it is often preached that the key to smart investing is having a long-term view. That is, buy and hold good-quality stocks for long periods of time (10-plus years). It is argued this kind of passive approach, in the end, has better returns than an active approach.

Yet, on the other hand, I have read other articles that argue that one of the biggest mistakes individual investors make is holding onto their losers (when fear sets in) and not selling them soon enough. So, which is it?

–Nat

A. I have worked with thousands of clients during my career as a Certified Financial Planner. A key observation I can share is that there is no one-fits-all approach to financial planning, and the same applies to investing. There simply is not just one right way to invest your money. The right approach will differ from person to person, and even potentially from one person’s investment account to another of their accounts, depending on time horizon, taxation and other factors.

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About Article Author

Money Sense

MoneySense is a Canadian personal finance and lifestyle magazine published by Rogers Publishing Limited, a division of Rogers Communications.Written for Canadians who want to take financial control of their lives, MoneySense is Canada's best-selling investment and lifestyle magazine, helping readers make smart, informed decisions about how to get the most from their money. The magazine has received many awards, including multiple National Magazine Awards and CFA Society Toronto Awards.

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