The Problem With Buy and Hold

Funds that buy stocks and hold them forever, like Fundsmith or Lindsell Train, should focus more on valuation, according to Artemis's Simon Edelsten

David Brenchley 25 April, 2019 | 9:42AM

Robotics, buy and hold investing, investment, valuation, healthcare, robotics, automation

Investors should re-assess the risk/reward of “buy-and-hold” funds run by the likes of Lindsell Train, Fundsmith and Baillie Gifford, according to Artemis’s Simon Edelsten as he looks to take his Silver-rated fund into even more defensive territory.

Edelsten runs his Artemis Global Select fund with a quality-growth bias but a valuation discipline that he says many of his peers, which are ever-more popular with retail investors, do not. And that is likely to see them run into problems as the economic cycle continues to roll on and, eventually, reverse. Valuation investing is at its simplest, the discipline of selling stocks when they become too expensive. 

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Alphabet Inc A1,616.11 USD3.80
Amazon.com Inc3,036.15 USD-5.45
Bristol-Myers Squibb Company58.45 USD0.92
Daifuku Co Ltd10,730.00 JPY-1.20
Facebook Inc A263.11 USD-6.31
Mid Wynd International Inv Tr PLC O Inc642.00 GBX-2.73
Roche Holding AG295.20 CHF-0.20
Vodafone Group PLC103.00 GBX-0.48

About Author

David Brenchley

David Brenchley  is a Reporter for Morningstar.co.uk

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