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Dodge & Cox on the So-Called Demise of Buy-and-Hold

Dodge & Cox's Diana Strandberg says the current environment highlights just how difficult it is to time market cycles, highlighting the importance of persistance with stock picks.

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Dan Culloton: As a buy-and-hold and bottom-up investor, certainly you must have heard and had an opinion on a lot of the questions from some corners of the investing universe over the durability of a buy-and-hold strategy after the past 18 to 20 months. Is buy-and-hold dead?

Diana Strandberg: Well, I go back to what we think--and one of the lessons we hope investors take to heart watching the current year unfold--is that persistence matters greatly to your long-term returns. To the extent that we continue to look bottom-up at individual companies and where we feel the valuations are attractive on a 3-5 year basis, we want to be able to persist as an owner of these businesses. And what the current market has taught us--and we've seen this in other instances as well--is that things can turn on a dime, and it's notoriously difficult to pick the moment.

Dan Culloton has a position in the following securities mentioned above: DODFX. Find out about Morningstar’s editorial policies.