Thanks to the web, the dissemination of knowledge is happening in record time. But that also means that consumers’ tastes, needs, and wants are changing at a record pace. Can we blame investors for not feeling comfortable committing to stocks of their favorite companies for the long term?

Take for instance, Crocs (CROX), which went public in 2006. As the word spread -- fueled by peer influence -- its sales and popularity grew. The stock quintupled in less than 2 years, rising from $14.27 to a high of $74.75. In the following 2 years -- as consumers moved on -- the stock price was cut by 95%. It’s currently trading at $3.57.

Many such examples abound in the tech sector. Take the case of Motorola (MOT). It was number-2 in the cell-phone business at the end of 2006 with a 23% market share on the back of the runaway success of the Razr. But it stumbled on the transition to 3G and Smartphones, and has now become a shadow of its former self. Similarly, Sun Microsystems (JAVA) was the "dot” in dot.com during the Internet era of the late ‘90s. It was recently sold to Oracle (ORCL) after a 95% drop in stock price.

This doesn’t mean there weren’t winners that would have richly rewarded buy-and-hold investors. The same technology trends that undercut existing companies’ business models also launch new success stories and are the successes of the future. Research in Motion (RIMM), Apple (AAPL), Amazon, and Google, to name a few, have given buy-and-hold investors plenty of reason to smile.

However, the rapid pace of change means that to stay competitive, companies must not only be innovative, but paranoid about the need to constantly reinvent themselves to stay in sync with the changing times. The risk is high, since plenty of research suggests that the success of a company, ironically, sows the seeds of its own eventual failure. Over time, successful companies become more inwardly focused. They concentrate on preserving the status quo that’s the source of their profits so as to launch a new future from inside the 4 walls (as opposed to allowing a competitor to do the honors). Consequently, for every Apple, there are many more Sun Microsystems.

This increasing pace of change creates another significant risk factor for the buy-and-hold investor.

4. Once beaten, twice shy: buy-and-hold versus “buy-and-forget.”

In reality, buy-and-hold was never intended to be pursued without any risk-management techniques. However, risk management hasn’t been the strong suit for Wall Street firms. Consequently, instead of marrying buy-and-hold with sensible risk-management strategies, many people interpreted (or unintentionally implemented) buy-and-hold as what I call a “buy-and-forget” strategy -- with disastrous results.