So for brokers struggling with the retiree intent on opening an options account, here's more ammunition on why reducing equity exposure would be a more prudent alternative. . There are times when buy and hold doesn't work . Not often, but a few times a century stocks become so inflated they provide terrible returns for years to come. The idea that it may take a decade or more for stocks to return to these levels will sound shocking to many of today's investors. However, it's in their best interest to shock them because it's happened in the past, and more likely than ever to happen again with the market selling at the highest level in history.
Stocks are expensive by any historical measure .
You would think this argument would resonate with those thrifty clients, but there's nothing like a mania to turn the law of supply and demand on its head. As a result, the same client who believe a dollar is an outrageous price for a loaf of bread may ask you to average up in Qualcomm. More on the Nasdaq later. Despite the Dow's miserable recent performance, most Dow stocks are not cheap. The fact is, a number of Dow stocks remain high priced.