[squiffy]

It depends.

In the Book of Five Rings, Miyamoto Musashi says that whether it is better to use a long sword or a short sword, depends on the amount of space available where you are fighting. If you are fighting in a small room a short sword has an advantage, in an open space, the long sword has freedom of movement and a longer reach. Though a sword that is too long and too heavy, might be hard to wield quickly.

In chess, the knight tends to have an advantage in closed locked positions and the bishop tends to be stronger in wide open positions.

With mortgages, as some others have pointed out, your holding period determines which mortgage you should choose. If you will only stay in the home a short time before selling, then an ARM may get you the cheapest interest rate for that period. BUt if you plan to stay in the home for 30-50 years, a fixed mortage might lock in the cheapest rate.

5% and 6% are the cheapest rates in 40 years. Why would you not lock that rate in.

When gas was selling for $1 a gallon, it would have been nice to be able to lock in that price for 30 years.

Given that real estate transactions costs are high, the person who buys a home and stays in it for a long period of time, might tend to do better than one who repeatedly buys and sells the same-sized home.

Remember, every time you sell, you may have to pay a 5% commission, you have to pay moving costs, you incur stress, and you may have to pay taxes, depending on your situation.

Stocks used to be more expensive to trade. So people tried to buy and hold to avoid taxes and trading costs. Now that you can trade shares for pennies per share, you can trade in and out more, over the short term, without paying as high a penalty.

With real estate, the penalty for short-term trading is high. So, in general, you want to buy and sell less frequently, rather than more more frequently.

The higher the trading and taxation costs, the longer your holding period should generally be.

If every time you sell, you lose 10% of your equity. You want to be careful not to buy and sell too much. And remember, you can be wrong about your timing. If you sell at the wrong time and the land goes up in value 30%, you have left money on the table. On the contrary, if you hold and the land drops in value 50% and never recovers, this sucks.