Mark Cuban on Buy and Hold

In a recent interview the following question was posed to Mark Cuban:

Is the subprime-mortgage scare likely to have lasting impact on the Dow? Do you believe Bernanke and the Fed have responded reasonably? Where do you think the markets are headed in the next few months? How should the average investor respond? Should any of this be of concern to a billionaire in the media, entertainment, or sports biz?

Cuban’s answer:

I have no idea, and neither does anyone else. All I can say is to remember the months of July and August and how you felt every time you saw what the market was doing. Imprint the volatility and angst that most in the market felt in your brain. Then when one of these funds tries to come along and explain to you how wonderful buy-and-hold is and how it always works, think about these couple months. Then make a decision whether the upset stomach from watching the markets go up and down, plus the risk of losing some, or possibly all, your money, is worth the few percentage points you might make over the 5 percent or more a C.D. is paying.

This is a clear challenge to accept more than what the broker machine offers you. But it all ultimately comes down to what you want: average or above average?

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