How to Become a "Buy and Hold Forever" Investor
Financial stability is mandatory to be a great passive investor
This is not a story about “how” to invest. I’ve laid out the evidence for the most rational investing strategy in great levels of detail here.
I can sum it up that rational investing strategy in 15-words:
Buy a handful of low-cost index funds and never sell them under any circumstance.
Doing anything beyond that is likely to do nothing but rob you of time and money. Whether or not you fully buy-in with index funds as the optimal investing strategy, one thing most people agree on is that to maximize your investment returns, you need to stay invested.
The easiest way for an index investor (or any investor) to lose money is to sell their investments at the wrong time. Selling when your investments are downturns paper losses into real losses.
There are two reasons investors tend to sell at the wrong time.
They tinker with their portfolio usually, usually by trying to time the market, which usually ends badly.
They are forced to sell. Their financial situation took a turn for the worse, and they need cash now, which means they are forced to sell their investments even if it’s a terrible time to do so.