Quote:
Originally Posted by davidt1
No one buys and hold forever. It is understood that you can not hold forever. The term buy and hold has its root in the mutual industry, as they want money in the funds for as long as possible so they can collect fees. Most people are probably not aware that stocks inside a mutual fund are actively traded everyday.
A trailing stop is used to lock in the gain and protect against loses. The trailing stop will follow the price at whatever percentage you set it at. Thus you can hold until that trailing stop is triggered.
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mutual funds are not buy and hold forever , they have someone who makes the decision to buy and sell other than you so you do not have to .
as far as stops loss , they are the best way to get burned .
the flash crash we just had where stocks opened almost 1000 points lower executed at the opening prices which were as much as 10% lower then where stop losses were set .
you don't get the stop loss price , you get the executed price .
i thought i was shrewd having stop losses and trailing stops on some of my etf's , just in case .
well what i surprise i woke up to as they were executed at the early morning lows at prices way below the trigger points only to have them recover 900 points later ..