View from the Observation Deck

1. Investors who follow the financial media have been told by traders and hedge fund managers for years that buying and holding stocks no longer works.
2. Pundits like to cite the S&P 500's cumulative total return of -9.10% from 2000-2009 as evidence. It even has a name: "The Lost Decade."
3. The chart clearly shows the pundits are wrong. While the industry's definition of long-term investing is five years, these cumulative returns span 10 years.
4. The S&P 500's cumulative price-only return (chart) for the past 10 years is 30.24%. The returns of the top 10 S&P 500 subsectors ranged from 182.84% on the low-end to 479.39% on the high-end.
5. Study the chart for a moment and you can see the diversity of these subsectors.
6. So what is the bottom line? What matters most, in our opinion, is where and when you invest your capital, not how fast you can move it around chasing returns.
7. There is no single-best "mousetrap." Figure out where the potential opportunities are first and then choose the appropriate investment vehicle to exploit those opportunities.