Traders vs. Investors

[DblArrow]

Heard a comment on the radio today - guy says that the stock market going down shows how bad the economy is. Greenspan just got through saying that it didn't look all that bad and things are improving. If the market is still really overvalued, as some say, then the market must come down to meet that valuation, at some point.

My question is this - how much of the market movement would one guess it attributed to the general investing public and how much to traders? Do we put the big funds in with the investing public (as it is their money)?

Most of us traders don't care which way the market is going, I can go short just as easily and quickly as long (futures). My guess would be a majority of the investing public is buy and hold and finally sell when all hope seems lost (capitulation).

Guess what I seem to be really wondering is the market moving based on fundamentals? or is it moving on technical analysis?

Make 'em pretty, Chris

 

[Babak]

The more you zoom out (in time frame) the more you will get a clearer picture of the movement attributed to underlying forces in the market/economy and the less to noise (traders, hedge funds, etc.)

 

[Andre]

Guess what I seem to be really wondering is the market moving based on fundamentals? or is it moving on technical analysis?

It seems absurd to suggest that a market has ever moved on/because of technical analysis. But I used to think the market moved on fundamentals. Now I think it's simply panic/fear and hope/greed that moves a market. Not much else seems to be involved.

 

[Pabst]

What ultimately moves the market over longer time frames is the investment mood of John Q. Public vis a vis mutual funds. Huge redemptions all week. Even in funds that haven't seen outrageous redemptions, managers are selling stock to have cash on hand just in case. I'm sure some of you guys with closer connections then me are hearing about a decent amount of forced margin liquidations.

 

[andrasnm]

This is, at least my "litmus test".
No matter how long you hold if your portfolio consist of short positions, futures, gold - you are a trader.
If you buy and hold or cash - you are an investor.

 

[Bono]

In Bull markets, investors rule ... In Bear markets, traders rule ...
full stop

Good Trading !

 

[Atlantic]

Originally posted by Bono
In Bull markets, investors rule ... In Bear markets, traders rule ...
full stop

Good Trading !

maybe investors should learn to invest on the short side ...

 

[SilverBullet]

I guarantee I do better in bull markets than any investor....

 

[Bono]

Ok Bullet If u say so ... of course many traders do better than many other investors in bull markets I just meant the idea in general ... but genius traders do exist

 

[Andre]

I guarantee I do better in bull markets than any investor....

Sure. But is that because you're a trader or because investors are willing to put their money into a bull market? Chances are it's both. A trader is more in tune to the daily swings of the market than an investor, and he's got more places to pull money out of the market when a bull is running.