Buy and Hold SP500 Not A Good Idea Afterall....

[GCSICLRBC]

Quote from Ivanovich:

Go EASY on me, Ivan.

It was an unfortunate SCHHHMELLTING accident!

 

[TraderSystem]

Quote from sjfan:

This is the point that's in dispute here. I disagree with this.

First, there has been periods of high gold-based inflations. The Spanish conquest of the new world was the most well known one.

Second, gold was once the obvious form of money used in international trade. It's no longer the case. And the world is no longer disconnected like it was. An economic failure in one part spreads via contagion.

Finally, so what if gold is beautiful and hard to mine? So is a LOT of things - some that are far more useful today than gold. Look at it this way, if the world goes Mad Max tomorrow, ammos, tin cans of food, and women will be currency. What is a gold bar going to do then? no one has any use for it.

All money is fiat.

..............

An interesting post, sjfan. Could you please explain "All money is fiat." ?

Thanks!

 

[dirkd]

buy and hold is similiar to being the last one in the shower picking up the soap. Sure it feels good in the beginning nice bar of soap, your gonna get real clean. then you find out that "man my ass hurts." :eek:

 

[piezoe]

Arguably, the single most important chart for any long term investor to study is that showing the average return of the S&P, leaving out dividends, for any 20 year period in CONSTANT DOLLARS. (Charts such as this have been posted here on ET, but i am unable to locate one at present) This chart shows that the average return, once dividends are eliminated is virtually the same as the return from government bonds before accounting for inflation. In other words, very little real return from earnings growth occurs. Thus the returns that stock brokers and mutual funds tout is in fact mostly the effect of inflation on the market, and very little gain in constant dollars is achieved on average for the entire market. The lesson to be learned is that if one is to take a long term buy, hold, watch and adjust approach to investment, then one had better consider buying only those issues that pay healthy dividends and are likely to continue to do so and to grow their dividends over time. Even then the risk of poor timing remains.

Quote from nravo:

Americans are impatient. But and hold mans buy and hold a broad-cased index, not a stock, for 20-plus years, not five or 10. Check the 20-to-25 year rolling returns. Out of the last 100 years, I think like 97 of them are positive and most largely so. If I were 45 or under right now, I a would absolutely have 100 % of an IRA in, say a SPY. If you are 45 and moved all your money there 12 months ago at the height of the market, you'll still come out on top but not until the end of the cycle. You just got hit by a worst case Monte Carlo situation, big losses in the front of a term.

 

[Gyles]

Had come across an interesting article as follows:
Advisers Ditch 'Buy and Hold' For New Tactics

In the above, Matthew Tuttle had hired Mr. Murray for some trading systems. Can you please elaborate on that, Mr. Murray? Thanks!

 

[Murray Ruggiero]

Quote from Gyles:

Had come across an interesting article as follows:
Advisers Ditch 'Buy and Hold' For New Tactics

In the above, Matthew Tuttle had hired Mr. Murray for some trading systems. Can you please elaborate on that, Mr. Murray? Thanks!

Mr Tuttle hired me to develop trading systems for his commodity pool last summer. We then decided to apply this technology to ETF's and have developed several different programs for that. We have developed all of these programs in TradersStudio. Some of what we are doing required new features in TradersStudio which we have added and will make available in the professional version.

We have three different programs, One is long/short , the other is long only. The third is a longer term , rotational type model which we are currently finishing.

 

[Gyles]

Sincere thanks for the reply, Murray.

I agree that since he is your client and you may not be able to show us the systems you are trading for him. However, is it possible to show some graphs or screen shots of the results?
Thanks!