Thank you for the reply. This is the kind of thing that reinforces my suspicion that the standard buy & hold advice is not very good advice. And in fact the really cynical part of me suspects that such advice serves mainly to herd average joes’ money into the markets so savvier investors can then nick it with formula trading on fluctuations and that sort of thing. This can only work if there are masses of set-and-forget money just sitting there not reacting.
OTOH, you mentioned that you’re winding down the speculative part of your portfolio. Why are you doing that if you’re consistently getting good returns? I would almost expect you to do the opposite — to increase the speculative part. Is this a strategy for retirement or something along those lines, where you’re needing minimum risk?
BTW, in doing small trades on fluctuations, do you run into the tax on “churning”, where if you buy and sell within a certain time period you pay a penalty. Or is that the tiny pennies/$600 tax you mentioned in your last paragraph?
The taxes on churning aren't much of an issue since the IRA (where I have most money) is getting most of the activity. The rest gets summarized on a 1098 form provided by Schwab before the next tax season.
The only penalty, so to speak, is that you pay taxes on 100% of your capital gains held for less than a calendar year, versus 60% of them if held longer. Again, not an issue if invested in an IRA where the taxes are only assessed when you withdraw. I used FIFO accounting on my IRAs and LIFO (to generate more long term capital gains) on the fully taxable brokerage accounts.
And, yes, there are some "buy and hold" type investments. If they consistently pay good dividends and appreciate as well, there is no real reason to get rid of them. Or if you do, just balance them from time to time by selling on upswings and buying back on dips. Utilities and REITs tend to fall in this category. Two of my favorites are POR and AEP (for utilities) and CLDT and O (for REITs).