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You're driving down a road trying to go forward by looking in the rear view mirror. The past is not prologue. trying to pick a winning fund or stock by looking at it's past returns is a bad idea. As a matter of fact, the idea is SO bad that the US government requires finance management companies to tell you just how bad an idea it is. Never confuse past results with what could happen in the future, you'd just be asking for trouble.
"Past performance is no guarantee of future results"
Ever heard of it?
Past performance is ABSOLUTELY something to take into account and be looked at when deciding on investments, it's not a guarantee.
Ok man, buy high and sell low for all I care. I'll continue buying more at pullbacks.
I don't buy high and sell low, I simply don't sell. I'm a long term, buy and hold investor, you know, like Warren Buffett, the most successful investor of our time. Timing the market works great, until it doesn't. It requires you to be right twice; getting out, and then getting back in. Over time, a simple, broadly diversified, low cost index fund will destroy most active traders/times. Again, it's been researched to death by the brightest, smartest, Nobel winning laureates on earth, but hey, if you think you're smarter than them.........
Past performance is ABSOLUTELY something to take into account and be looked at when deciding on investments, it's not a guarantee.
Agreed. However, it is certainly waaaay down on the list in evaluating a security. That's how so many investors get burned, by looking at past returns.
I don't buy high and sell low, I simply don't sell. I'm a long term, buy and hold investor, you know, like Warren Buffett, the most successful investor of our time. Timing the market works great, until it doesn't. It requires you to be right twice; getting out, and then getting back in. Over time, a simple, broadly diversified, low cost index fund will destroy most active traders/times. Again, it's been researched to death by the brightest, smartest, Nobel winning laureates on earth, but hey, if you think you're smarter than them.........
Warren Buffet certainly trades stocks, he doesn't simply hold everything forever. He coined the saying "Be fearful when others are greedy, be greedy when others are fearful". This flies in the face of what you're recommending as he's essentially saying to buy MORE when times are tough and get out of some (be fearful) when things are great. His advice is more closely related to what I do.
I understand you're a "buy and hold" investor, and I am too for the most part. But that is a simplistic approach, there are "traders" that get in and out more quickly and realize higher returns. I'm sure you mean well, but my approach has worked and I'm not taking advice from a random internet poster. For all I know you may be amateur hour that doesn't have 7-8+ figures in their net worth.
Warren Buffet certainly trades stocks, he doesn't simply hold everything forever. He coined the saying "Be fearful when others are greedy, be greedy when others are fearful". This flies in the face of what you're recommending as he's essentially saying to buy MORE when times are tough and get out of some (be fearful) when things are great. His advice is more closely related to what I do.
I understand you're a "buy and hold" investor, and I am too for the most part. But that is a simplistic approach, there are "traders" that get in and out more quickly and realize higher returns. I'm sure you mean well, but my approach has worked and I'm not taking advice from a random internet poster. For all I know you may be amateur hour that doesn't have 7-8+ figures in their net worth.
I agree, almost completely. Yes, buying on dips is smart, but it can be argued that that's not really timing. What happens if you buy a company on the "dip" and it goes belly up. Or, how do you know when to sell it. Look, there are many different investing styles out there, who am I to tell others how to invest? But I'm also a realist, any many investors aren't when they believe they can reliably time the market. Let's face it, timing the market requires a crystal ball because it requires one to predict the future, which we all know, is impossible. I don't have loads of cash to buy on tips so I do the next best thing, I dollar cost average into the market, and I never stop, no matter what. It's paid off handsomely for me. I don't know if that makes me smart or not, but I know I'm disciplined.
I agree, almost completely. Yes, buying on dips is smart, but it can be argued that that's not really timing. What happens if you buy a company on the "dip" and it goes belly up. Or, how do you know when to sell it. Look, there are many different investing styles out there, who am I to tell others how to invest? But I'm also a realist, any many investors aren't when they believe they can reliably time the market. Let's face it, timing the market requires a crystal ball because it requires one to predict the future, which we all know, is impossible. I don't have loads of cash to buy on tips so I do the next best thing, I dollar cost average into the market, and I never stop, no matter what. It's paid off handsomely for me. I don't know it that makes me smart or not, but I know I'm disciplined.
This is exactly why I said earlier that I don't "time the market", I said I'm an active trader that holds some cash to increase positions on dips. I specifically said that's not timing the market, someone else called it that. To me, timing the market is holding onto a huge amount of money and trying to predict where the bottom is and in turn you maybe miss out on a bull market. I simply hold "some" for opportunities when they arise and yes I have traded volatile stocks on the peaks and valleys when I see trends happening over and over. It's not something done with 90% of my portfolio, think less than 10%.
I don't buy high and sell low, I simply don't sell. I'm a long term, buy and hold investor, you know, like Warren Buffett, the most successful investor of our time. Timing the market works great, until it doesn't. It requires you to be right twice; getting out, and then getting back in. Over time, a simple, broadly diversified, low cost index fund will destroy most active traders/times. Again, it's been researched to death by the brightest, smartest, Nobel winning laureates on earth, but hey, if you think you're smarter than them.........
Warren Buffett believes in buying stocks during periods of crisis. He has written several books and in nearly all of them, he will mention that times of financial crisis is the best opportunity to buy stocks because they are essentially "on sale" as he describes it. In fact, those investors who bought stocks after the 1987 crash and during the financial crisis in 2008 became very wealthy. He is not a trader in general. You are right in that he does advocate buying and holding. However, Buffett is all about timing the market. Asufan has already alluded to this, but Buffet is heavily active and buys when everyone else is selling. Buffet also buys individual stocks and lots of them. He doesn't limit his investing to index funds. Buffet is being fairly active at this time. I would not be surprised if he buys an airline. He has already invested heavily in Delta and he may decide to buy a majority share in it.
Phoenix will always go through upswing and downswing, even more so than other similar populated areas because Phoenix's economy is centered on real estate speculation, which isn't real. Real estate developers and politicians incentivize population growth and inflation of housing prices for their own benefit. It's one of the best ways to make easy money in Phoenix. I don't understand why more people don't wait till the market inevitably bottoms out. In that period you can invest in crappy single story tract housing and sell it during a high period for a nice profit. I've taken so many of those crap houses and made so much money in the last couple of years. I could have made even more if I had more money, but the truth is you need massive amounts of financial capital to really get incredibly wealthy in this game, so the richer get richer pretty much. It's unbelievable. I got crappy stereotypical Phoenix houses around 2009ish and recently sold them for a good chunk of cash. I always thought it was crazy how the local media and desperate residents prop up this fake industry without realizing it. It wasn't until retirement age I was able to really get into this and thankfully I had a few friends who were already in real estate when the market crashed. I decided to take a risk and I haven't looked back since. Mark my words, the market will fall and rise and again and again and again... It's one of the reasons why I took the leap when the historic 08 crash happened, but I don't see that level of housing market collapse happen. There are still opportunities to make money with the way the Phoenix economy operates though, so I still recommend investing in real estate and riding the Phoenix fall and rise.
Warren Buffett believes in buying stocks during periods of crisis. He has written several books and in nearly all of them, he will mention that times of financial crisis is the best opportunity to buy stocks because they are essentially "on sale" as he describes it. In fact, those investors who bought stocks after the 1987 crash and during the financial crisis in 2008 became very wealthy. He is not a trader in general. You are right in that he does advocate buying and holding. However, Buffett is all about timing the market. Asufan has already alluded to this, but Buffet is heavily active and buys when everyone else is selling. Buffet also buys individual stocks and lots of them. He doesn't limit his investing to index funds. Buffet is being fairly active at this time. I would not be surprised if he buys an airline. He has already invested heavily in Delta and he may decide to buy a majority share in it.
Buying in times of crisis, as mentioned before, is not really market timing. It's smart. Timing is getting out when you think things are going to go south, and then trying to get back in when you think the market has hit bottom. That rarely works. When Buffett sells something, which he rarely does, it makes front page news because it's so rare. Buffett became wealthy by buying and holding good companies, forever. His own advice to most investors is to just buy and hold a low cost index fund. Smart money knows that trying to pick winning stocks, or trading in and out of stocks in an effort to "chase" returns is a fools game. Read "A Random Walk Down Wall Street" written by Burton Malkiel. The book is filled with indisputable evidence that stocks are completely random and cannot be predicted by anyone. Or, "How a Second Grader Beats Wall Street." A real eye opener.
Phoenix will always go through upswing and downswing, even more so than other similar populated areas because Phoenix's economy is centered on real estate speculation, which isn't real. Real estate developers and politicians incentivize population growth and inflation of housing prices for their own benefit. It's one of the best ways to make easy money in Phoenix. I don't understand why more people don't wait till the market inevitably bottoms out. In that period you can invest in crappy single story tract housing and sell it during a high period for a nice profit. I've taken so many of those crap houses and made so much money in the last couple of years. I could have made even more if I had more money, but the truth is you need massive amounts of financial capital to really get incredibly wealthy in this game, so the richer get richer pretty much. It's unbelievable. I got crappy stereotypical Phoenix houses around 2009ish and recently sold them for a good chunk of cash. I always thought it was crazy how the local media and desperate residents prop up this fake industry without realizing it. It wasn't until retirement age I was able to really get into this and thankfully I had a few friends who were already in real estate when the market crashed. I decided to take a risk and I haven't looked back since. Mark my words, the market will fall and rise and again and again and again... It's one of the reasons why I took the leap when the historic 08 crash happened, but I don't see that level of housing market collapse happen. There are still opportunities to make money with the way the Phoenix economy operates though, so I still recommend investing in real estate and riding the Phoenix fall and rise.
I agree with your comments about 90%. Where I would disagree is that there is a growing Phoenix economy not reliant on real estate.
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