3 replies to this topic

[sjj]

It amazes me how much time/effort is spent trying to figure out complicated ways of making money on the downside in the midst of an ongoing 5 year bull - when very little effort is required to make money on the upside - but still so often missed. I won't ask how many folks have outperformed the major indexes over the last 5 years because I know the select answers I'd get - and of course there truly are exceptions who have outperformed the markets. The average guy on this board - no way. To scratch that itch to gamble, simply following the well established S&P channel for the last 5 years - easing up on positions at tops and reinvesting more heavily at bottoms - makes for a couple repositionings each year that is satisfying. Will the channel to the downside eventually fail - absolutely. When I see that 20% or so I'll get real nervous and acknowledge - but I'll still be way way ahead of the game. In the meantime, the only breaks from the 5 year channel that I've seen has been on the up side

[toni]

sjj A man named Ellis wrote a book called "The Losers Game". He proved beyond any doubt that trying to time the markets & trying to pick stocks or sectors is a losers game played by the worlds losers. Some do succeed for a while, but if they persist they are always losers in the end. Academec research by the best minds in the economic world prove this beyond any reasonable doubt. Select one of Vanguard's Target Date Retirement Funds when you get your first job out of school and put part of your pay check in it every payday. In a 401K retirement plan take the employer's match. Do that without any trading in and out for 40 years and retire at 65 a millionaire. Those who try to trade instead of buying & holding during that same period will be Walmart greeters when they are 65. Don't try to outsmart Mr. Market. As the hedge fund hustlers are finding out there is no increased return above the market return without increased risk. Toni B

[sjj]

Toni, Probably not a bad strategy for many, particularly if risk is reduced as retirement years approach - which I understand is the idea of Target Date Retirement Funds. However, I do not believe that anyone has proven anything beyond any reasonable doubt regarding what will happen in the next 40 years. Personally, I didn't ride down the market from 2000 to 2003 and don't plan on riding it down big time in the future.

[toni]

sjj But how do you know when the market is going down big time as in 2000? And how do you know when to buy back in again even if you know the top at the time it made the top? I don't, and if Ellis and most of the Nobel winning financial academics think noone does I will take that as fact. My 401K has Vanguard Life Stratagy Funds as an option. I just go into the Vanguard Moderate Life Stratagy Fund with 10% of my take home pay and get a 5% company match and plan on doing that and letting it ride without touching it until I am 55 in 19 more years. Then switch to the Vanguard Life Stratagy Conservative Fund for the next 8 years until retirement. I think I will be far ahead of all of the retail traders posting here. Those selling their advise on how and when to trade may do better, but it will be from selling their advise, not from their personal trading. And the hedge fund hustlers will make their money from their 2 & 20, not from their trading. At least that is the way I see it. Toni B