Most fund strategies are just buy-and-hold. The real skill is managing risk, not picking stocks. Investors with a multi-year horizon can buy quality companies and add to positions when prices drop, like Buffett does, reducing loss risk over time.
So that's part of the bond. So there's no real strategy involved other than I'm going to buy and hold. That's your strategy in most funds. And you may want to switch, which occurs more costs as well, into the favorite month, for instance, at the end of the year when you have your annual review. But who, again, it goes down to in principle, fundamentally, who's really managing that? Who's the actual expert in these things? We're not experts in any one specific thing. What we are very good at is managing risk. Like you said, on the floor, one of the key things we learn is risk management. It's not, okay, this is the right future option stock to buy today. It's about how much am I really happy to lose initially? Once you do that—
Risk capacity. And one of the easiest advantages that people have when they're managing their own capital is that they can then increase the timeline. So, they're not trading like you were on the floor and thinking, how much am I happy to lose in 5 minutes? Well, actually, no, we're not looking at trading. In any event, they're going to be holding for a year, 2 years, 3 years in quality companies. And if I flip that around from what you were doing as as a trader to what people should do as an investor. You should have the companies where if they drop, as Warren Buffett often says, you want to buy more of them. So, in that sense, you're never losing because you've got a long timeframe because they're quality companies, and they're the type you want to buy more of should they fall.
