Instead of buying and selling, this approach to investment focuses on buying more quality assets and accordingly the rebalancing of a portfolio.
When the opportunity cost is measured over years, waiting it out can be a very expensive game.
Buy and hold for the long term?
While the superannuation industry has its many well--documented foibles, spruikers and ticket-clippers, the super system does serve one critical purpose for Australians in that it forces a high proportion of Aussies who might otherwise fail to do so to save and invest for their retirement using a long term focus.
As the ABS released its Finance and Wealth data for the December 2014 quarter yesterday, let's take a brief look at what we can learn.
Firstly, in Q4 2014 household wealth increased by $189 billion or 2.5 percent to a new record high of $7,889 billion.
Cash and deposits are at all all-time high of $903 billion representing some 22.8 per cent of financial assets, which is now well above the decade average of 20 per cent.
The increase in household wealth in the final quarter of the year was driven largely by holding gains in land and dwelling assets (+$101 billion) and financial assets (+$53 billion) as dwelling prices and share markets push higher.
However, before signing off it was pleasing to note that the ratio of household debt to total household assets has continued to decline to 20.7 percent, which is some way below the respective 2009 and 2011 peaks of close to 22 percent.
According to the ABS, the interest payable to income ratio has been in a "gradual downward trend" since the global financial crisis, now sitting at 10.4 percent, way down from above 16 percent at the ratio's peak.
Meanwhile dwelling prices are also rising in the three most populous cities, but are flat or declining in most other major conurbations.
Overall, this was a happy data release, with household wealth per capita breaking record highs and more gains expected.