Market timing is unnecessary
- Thread starter mrmarket
- Start date
To be successful in this assumption, you probably need to start investing when you are 10 years old to give yourself the maximum chance for success.
You could find a stock that drops 3% a year when the market drops 5%. Your stock is going down but it is outperforming the market. The market comes back at 3% a year and your stock comes back at 4% a year. Again you outperform but for what benefit.
You need more in your analysis.
You could find a stock that drops 3% a year when the market drops 5%. Your stock is going down but it is outperforming the market. The market comes back at 3% a year and your stock comes back at 4% a year. Again you outperform but for what benefit.
You need more in your analysis.
Guess you haven't heard:
Past performance does not guarantee future results
There's been 20 year periods where the market made no new highs.
I wouldn't want to try this approach in light of all the baby boomer retirements coming up. With a negative savings rate and a high liquidation rate, US markets are going to have it tough for the next 20 years.
Past performance does not guarantee future results
There's been 20 year periods where the market made no new highs.
I wouldn't want to try this approach in light of all the baby boomer retirements coming up. With a negative savings rate and a high liquidation rate, US markets are going to have it tough for the next 20 years.
To do as you say, there is another "skill" necessary along with identifying stocks that will outperform the market. And that would be being able to outlive the amount of time you need to hold. But that presuposses you can identify stocks that, not may, but "will" outperform the market, as you said. But if you knew how to do that with that much certainty, you wouldn't have any losers at all in your portfolio. And if you didn't have any losers in your portfolio, you wouldn't have to live so long in order to reap the supposed benefits of holding until they've outperformed the market.
Your stock selection model's ok mr. market, but some of us see how we can make your kinds of gains (or better) without exposing any of our positions to the degree of loss yours gyrate through, and yet, are able to achieve the kinds of gains you claim, not in a few weeks or a few months as it often takes yours to do, but in hours or days, which is not only more profitable, but also a better use of working capital.