Stocks have done exceptionally well lately, with 2019 on track to be the best performing market since 2013. But many investors remain wary of the stock market, anxious with late-cycle worries and ever-fearful of a replay of the 2008 crash. This shows up in strong money flows into cash funds, which remain significantly above the year-earlier level despite the market’s impressive gains this year.

Many investors seem to be questioning their long-held beliefs, including the virtues of ‘buy & hold’ investing. On top of this are claims from purveyors of market timing who never tire of reminding us that this investment strategy was no longer relevant to the current uncertain environment.

It is important to remember that long-term investing, particularly a 'buy & hold' approach, remains as relevant today as it has ever been. And notwithstanding naysayers' claims to the contrary, empirical evidence continues to show the long-term superiority of a 'buy & hold' strategy over any other investing approach.

But to adequately benefit from this tested and proven strategy, investors need to guard against three major pitfalls. Here they are:

1) 'Buy & Hold' Doesn't Mean 'Buy & Forget'

Staying engaged with your portfolio is a must. Investing for the long run doesn't mean that you lose sight of developments in your portfolio. The 'buy & forget' mantra is a simplified take on the typically long holding horizons of investment icons such as Warren Buffett.

Buffett may be in the habit of keeping his investments for the long term, but he stays fully tuned into what's happening in each of his holdings. While the Oracle of Omaha is no doubt one of the most successful and famous exponents of the 'buy & hold' investing approach, he is by no means the only one. All of the successful practitioners of this approach stay well informed of what is going on with each of their holdings.

2) Don't Fall for the 'Buy What You Know' Mantra

Guard against the simplistic beauty of the 'buy what you know' mantra; another one of those skin-deep lessons learned from Warren Buffett's investment style.

Adherents of this 'philosophy' load up on stocks from a bunch of companies whose products they use. And then they keep those stocks forever, a la Buffett who has famously hung onto his investment holdings for years.

Being familiar with a company's product(s) is a useful, but not necessary, starting point to 'knowing' the stock as an investment opportunity. The decision to buy the company's stock should follow a thorough, due diligence process that gives you a solid appreciation of the company's prospects, competitive position and the proper value of its stock.

In fact, studies show that people have a crippling blind spot when it comes to stocks that they think they know. Too often they will overlook the negatives of the firm because they have fallen in love with the stock. Love is nice in your personal life, but there is no place for passion and emotions while evaluating stocks.

3) Stick with a Plan

Avoid haphazardly or randomly filling your portfolio with stocks you like. Always build your portfolio around an investment outlook and stay ready to make adjustments should that outlook change.

I am not suggesting that you need to have an elaborate and explicit outlook for GDP growth in the next quarter or year, but you absolutely need to have a base-case sense for the economy and the market.

If you expect a major economic downturn in the coming 12 - 18 months, your choice of investments would be very different from someone looking forward to a goldilocks-type scenario.

And you must stay nimble and flexible enough to adjust your positions should your outlook change.

Putting It All Together 

Please keep each of these pitfalls in mind while putting together your stock portfolio to increase your odds of success.