In “S&P; 500 Rally Poised to End; Buy and Hold Still Bad Advice,” Mish at Global Economic Trends revisits the fact that buy and hold remains to be a questionable long-term form of investing.
I want to hone in on his featured Nikkei monthly chart: The Japanese Stock Market is about 25% of what it was close to 20 years ago! Yes, I know, the US is not Japan, that deflation can’t happen here, etc, etc. Of course deflation did happen here, so the question now is how long it lasts. Even if it does not last long, there are no guarantees the stock market stages a significant recovery. Buy and hold is no more likely to be a good choice for the next 5 years than it was for the last 20. The subsequent consequences of a burst bubble are obvious and those not paying attention are bound to participate in the next leg down (as the chart shows) ending up with years of wasted investment efforts. While I certainly can’t be sure whether we will follow the lead of Japan and duplicate two lost decades, I can make sure that I will not follow the trend down whenever it reverses. Yes, that will include some false signals from time to time, which is a small price to pay for not going down with the masses. 
[Click on chart to enlarge]
This chart clearly demonstrates what I have been saying all along. You can have a tremendous rally off any bottom lasting several years, which will do one thing for sure: Cause investors to become complacent and confident that a new bull market is here to stay.