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Do you guys really make your investment decisions on what the market does on a day to day business? That seems like such a painful and almost impossible long term investment strategy!
Do you guys really make your investment decisions on what the market does on a day to day business? That seems like such a painful and almost impossible long term investment strategy!
Traders and speculators watch and attempt to predict markets. Almost by definition, an investor looks for long term returns and tries to avoid reacting to short term volatility. There is an issue with investors who closely follow the markets. It can become hard not to react to the short term volatility. Watching the markets can intensify concerns and worries. Many otherwise sound investors react by moving to a more conservative position which leads to lower returns. I know for sure I fight those tendencies and life as an investor is easier if I do not follow the markets.
Watching the markets can intensify concerns and worries. Many otherwise sound investors react by moving to a more conservative position which leads to lower returns. I know for sure I fight those tendencies and life as an investor is easier if I do not follow the markets.
Traders and speculators watch and attempt to predict markets. Almost by definition, an investor looks for long term returns and tries to avoid reacting to short term volatility. There is an issue with investors who closely follow the markets. It can become hard not to react to the short term volatility. Watching the markets can intensify concerns and worries. Many otherwise sound investors react by moving to a more conservative position which leads to lower returns. I know for sure I fight those tendencies and life as an investor is easier if I do not follow the markets.
Yep..when you start chasing the ups and downs you are in for 2 things... loss of money..and insanity. Not worth it. Stay in a smart , diverse fund mix and let it ride till you retire or need it.
Here is an example..ok , market drops so investor moves conservative. That's fine, now things get better...when does he/she make the leap back? Wait one more week? One more day? Uh oh it went down again ..should i stay out? Yikes.
We've seen people who self-describe as investors commenting every day and every night about move of the stock market, especially futures, like they are watching the ball in a tennis match. That's a sign of deep anxiety and either not having a plan, not having the right plan, or not able to sustain a plan.
Yep..when you start chasing the ups and downs you are in for 2 things... loss of money..and insanity. Not worth it. Stay in a smart , diverse fund mix and let it ride till you retire or need it.
Here is an example..ok , market drops so investor moves conservative. That's fine, now things get better...when does he/she make the leap back? Wait one more week? One more day? Uh oh it went down again ..should i stay out? Yikes.
jrk did not say anything about going back to a more aggressive model . he just said if you are a worrier a more conservative model will help .
other wise i use comfort as my guide as to when to pull back or go more aggressive , you just risk being wrong , but i wouldn't recommend big moves .
my comfort range is 40-50% equities . if i cut back , which i did pre dip , i was uncomfortable with it raining money every day and the leverage out there so i cut back to 40% . i waited until we dipped and moved back up . if i was wrong the difference would have been small , and if i am right i will pick up a bit of alpha but either way no biggie.
in this case i did pick up an extra few thousand dollars but either way no big deal . it is when you really go for big differences in or out that the risk gets pretty high you will either hit it big or miss big .
Yep..when you start chasing the ups and downs you are in for 2 things... loss of money..and insanity. Not worth it. Stay in a smart , diverse fund mix and let it ride till you retire or need it.
Here is an example..ok , market drops so investor moves conservative. That's fine, now things get better...when does he/she make the leap back? Wait one more week? One more day? Uh oh it went down again ..should i stay out? Yikes.
Yep. It's an impossible game.
As the saying goes it's about time IN the market, not timing the market. I know some people that are in the finance business for decades and still can't grasp that. It's always about " what about this, what about that, blah, blah blah blah"...
Depends on the investment time horizon. If you're going to need the money in the next couple of years, you shouldn't be in stocks.
well being in stocks is okay but you have to watch the level of equities and the type . i have money i will use starting next year out to 7 to 10 years in an income model portfolio . but it is only 25% in a dividend equity fund . its runs almost 70-75% less volatile than the s&p 500.
it has always worked great as a proxy for just bonds and cash with much better long term returns ..
jrk did not say anything about going back to a more aggressive model . he just said if you are a worrier a more conservative model will help .
other wise i use comfort as my guide as to when to pull back or go more aggressive , you just risk being wrong , but i wouldn't recommend big moves .
my comfort range is 40-50% equities . if i cut back , which i did pre dip , i was uncomfortable with it raining money every day and the leverage out there so i cut back to 40% . i waited until we dipped and moved back up . if i was wrong the difference would have been small , and if i am right i will pick up a bit of alpha but either way no biggie.
in this case i did pick up an extra few thousand dollars but either way no big deal . it is when you really go for big differences in or out that the risk gets pretty high you will either hit it big or miss big .
I was just making a general statement really...nothing direct at him.
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