asset allocation is superior to timing IMHO
Need advice from experienced investors!
- Thread starter tennisplayer23
- Start date
not even close imho
ABSOFRICKIN'LUTELY!
The concept of "market timing" is poo-poo'd all around. But unless you "inherit stock from your Aunt Martha and it passes to your kids in your estate"... you are a market timer. Whether you hold for hours/days/weeks or decades... you're a timer.
Warren Buffet buys companies when he sees them as "value-priced", then sells them later at a higher price (hopefully). THAT'S MARKET TIMING! It's not "scalping", but still "timing".
all those approaches: asset allocation, diversification, dollar cost averages, are invented by the Wall Srеeet just to attract the average investor which, we agree, is a sucker
but all suckers need a dream
sometime certifiable dream
so here goes another dream
i am done here
In the long run, DCA is just a form of "buy-and-hold". Any benefit from it is potentially seen in the early years when the $$ accumulations are small. Greater benefit, however, in high-volatility markets.
Almost without regard to investment performance is the benefit of accumulating capital... for which there is little substitute beyond inheritance or lucking-out in the lotto.
what's the alternative to DCA? Put $300 in your money market each month until you have 5k and wait for an opportunity and then go all in? My guess is everytime you save up 5k an "opportunity" will just miraculously appear.
sure
but buy and hold what?
American market
because it was one that was growing steadily and only on the growing market buy and hold works
but as you correctly pointed:there are just growth periods
and that applies not only to the companies but to the markets as well
so when the period of long growth will end, and it will end, or it will have some prolong correction.. buy and hold will stop working, along with other gimmicks
the problem is market has life that is much longer that of a man, market will improve but by that time our young friend will be 6 feet under...
so if this generation will be unlucky to live in the prolong period of zero or negative growth,, at the end they will have zilch...
period
as for accumulating capital
its is very possible that for this generation it maybe better to accumulate it under the mattress in the form of gold coins
which again bring us to the point of investing since gold is just another vehicle..
again nothing wrong with accumulation just one should not forget that any form of accumulation is investment in itself and require the method deciding in which vehicle to accumulate.. and when to switch from one instrument to another
coming back to a need for an investment method...
which again average investor does not have
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but that does not warrant protection against confiscation.... from which Uncle Sam was one step away in the 30-th