I was in the camp of buy and hold investors for a long time. With the rise of machine trading and traditional pump and dump, stock market is extremely volatile. It is getting increasingly difficult to make money the 'easy way'. That's why I tweaked my strategy to be more actively involved in trading. I call it Buy, Hold and Trade.
There are many many cases that show you traditional buy and hold doesn't work. One case came to my mind is my former largest position, Mart Resources. Attached is the stock chart. If you bought early at 15C CAD like me for example, and held it till the 25c CAD takeover went through while collected ~46c CAD in dividends. You will do well given oil price crashed and many companies went bankrupt, but not very well after watching the stock dropped from 2 CAD to 25C.
My trades were a little better, but I still regretted that I didn't sell a single share when the stock was over 2 CAD. I hang on to the stock too long at the end as I was expecting the first takeover to go through. (Now knowing the recent transaction on OML18, there were evidences that the Nigerian were trying very hard to close the first deal but failed to get the financing due to very difficult market condition.) The best trades were buy after the second deal fell and sold the shares into the third deal, which is 25C. It was very emotional for traders. But we need to keep our head clear and buy low, sell high.
My experience is that very few case buy and hold work. Though I always look for buy and hold stocks, I found that increasingly I have to trade in order to take advantage of the market. I usually trade around my core positions, i.e. I usually hold a core position of a stock, in the mean time, I buy and sell my swing positions using the market up and down. In illiquid stocks, I generally swing trading about 5, 10, 20% of my position. In liquid stocks, I can swing up to 90% of my position.
Here is another example. SRPT has been my top biotech in the past 5 years. In 2016, it had dramatic moves due to the FDA approval process. Using my solid understanding of the stock and approval process, I was able to take advantage of it and generated 4 digits in gains in stock and option trades. Here are some of my key trades in 2016.
Ironically, SRPT ended 2016 slightly lower than it was in the beginning of 2016. But I made profits in SRPT in 2016 than all the previous 4 years combined but using about 90% of my position swing trading.
Another area I always pay special attentions is which sector to invest. I started to underweight gold and gold miners back in 2012, selling all the leveraged energy plays in fall 2014, moving money into biotech started 2012... All proved to be timely.
I also pay attentions to special situations. The pulp trade after the Chile earthquake in 2010 was a big success. In 2013 I had great success in trading refiners taking advantage of the fracking revolution. In 2014 I scored huge gains in ethanol producers, taking advantage of the huge harvest of corn. All these trades generated 3 digits if not 4 digit return in a single year! In general, these type of trades are not buy and hold, but "buy ahead of the crowd and sell when everyone knows" type of trade. I am still looking for good candidate of buy and hold, but it is getting increasingly difficult in the recent market condition. So far I have long term holding in gold, OGC.to, that worked great. My long term holding in energy, POE.v, that hasn't worked out yet, but very hopeful in 2017.