04-01-2014, 10:23 AM
I like the term core holding, but do not like the term 'hold forever' at all. Fore me, a core holding represents a position that has a target weighting and which has an after purchase sentiment of long term hold. It may be in the accumulation phase, at say 1/4 full, 1/2 full, 3/4 full. Or it may be topped out at maximum weighting. Any shares above the core holding may be more transient, for trading purposes. So a person may refer to trading around the core position.
The problem that I have with 'hold forever' is that for many folks, that means hold with very little if any review, almost never looking for a more suitable replacement. To me it just makes sense, at least a couple of times per year to review, and see how such a core holding stacks up against the alternative investments. If the reason for originally buying remains valid, great. But if there are better alternatives at the time, then perhaps it is time to make a change. Investors tend to get too comfortable or to fall in love with their 'hold forever' stocks, and to me, that is not a healthy mind set.
The problem that I have with 'hold forever' is that for many folks, that means hold with very little if any review, almost never looking for a more suitable replacement. To me it just makes sense, at least a couple of times per year to review, and see how such a core holding stacks up against the alternative investments. If the reason for originally buying remains valid, great. But if there are better alternatives at the time, then perhaps it is time to make a change. Investors tend to get too comfortable or to fall in love with their 'hold forever' stocks, and to me, that is not a healthy mind set.
Alex