"Buy and hold" vs. active investment management - Marcin Tuszkiewicz, Investio for CMC Markets

The availability of financial markets and instruments with which to trade has increased several times since the time of Warren Buffet achieved his first successes. Despite this, his approach, based on investing in value and long-term commitment to the company, is still shown as a role model. "Buy and hold" vs. active investment management - this and more in the article by Marcin Tuszkiewicz.

Is it really a good method for everyone? 

The first thing to note is that Buffet by Berkshire Hathaway Inc. began to manage in 1970. The Dow Jones Industrial stock index fluctuated between 580 and 1000 points during this period. In 1982, the biggest boom in the US market began, bringing the DJI30 in 2000 to 11 points. During the 668 years of the fund's existence, the benchmark grew by 30%! Every PLN 1900 million invested in 1 would earn 1970 million. On paper, investing seems remarkably easy in such conditions.

After the crash in the 2007 year, the DJI30 index is also dynamically growing from the level of 6469 points, currently reaching the level of 22 370 point. The trend is already underway 8 years and during this time the index increased by 245,8%. Perhaps this is just the beginning of the second, 30 summer boom. Who knows? Maybe it is not too late to buy valuable companies and keep it all your life.

The problem, however, is in the second aspect of investments carried out by Warren Buffett. Well, the fund run by this eminent investor is composed of a team of analysts. At the same time, when the company Berkshire Hathaway calls, it certainly more willingly provides comprehensive answers to the questions asked than in the case of a call from an individual investor. This allows you to avoid the error of simple misinformation.

Not everyone can afford to invest in financial markets in the same way. Nevertheless, the method of selecting companies and the moment of making transactions is worth imitating. At the last high-profile investment in Bank of America, which was on the verge of bankruptcy, Buffett earned around 13,5 billion dollars, involving 5 $ 1 billion in this investment in the 2010 year.

CMC Markets training

To make your investments well-thought-out and reasonable, CMC Markets in cooperation with Investio organized a series of free workshops in the largest cities in Poland. During them, Marcin Tuszkiewicz will present the assumptions of three strategies that he uses in the markets:

• for a stock market investor whose results are shown above,
• for the daytrader, which allows for the rational use of financial leverage and the benefits of the currency market or stock market indices,
• and a "swing" strategy ideally suited to commodities, commodities and CFD per share.