![]() This is why most professional stockbrokers who follow actual technical indicators don’t do any better than boring old index funds.įollowing moving averages and portfolio management theories don’t hold a candle to set-and-forget or buy-and-hold. ![]() ![]() You’d think they have some sort of insider information that would give them an edge, but they depend on the same luck you do. And it’s almost all entirely luck.Īnd do you know who are some of the worst fantasy football players? Actual NFL football players. You follow your team like a person obsessed. Most of your transactions are done on a computer or phone. You start by picking the ones you value the most. Why?īecause no one wants to listen to someone hem and haw their way through a bunch of “maybes” and “ifs.” And if they have one right pick every once in a while, no one remembers the bad picks.īut if you objectively look at their track record and filter out the yelling, waving hands, and sound effects, you’ll see that they were wrong more than they were right.Īnd think about it, if they’re so good at predicting price movements, why would they need a TV show or sell you their trading strategies newsletter? People Attribute Luck to Skillįantasy football has a lot in common with picking individual stocks. This is exactly what the talking heads on those finance shows do. The key to doing this is to almost believe it yourself. I make brash statements with a lot of confidence, even though a lot of the time I’m full of it (except she uses a word that rhymes with “it”). If they did, it would quickly become the “ new normal” and inflation would skyrocket, after which everyone would be back in the same boat. Much less would they be on Yahoo Answers educating you on their investment strategy? The truth is if there were a right answer to that question, wouldn’t everyone already be doing it? Not surprisingly, most of the (facetious) answers would make a sailor blush. I remember when I used to answer random personal finance questions on Yahoo Answers for fun (Alex, I’ll take “What dateless finance nerds do on Friday nights” for $200, please), the single most common question was “How do I make a lot of money fast?” Why Do People Try to Time the Market? Everyone’s Looking for an Edge However, people use it to describe any time that there is any significant drop in a stock price that may have been overvalued. Market Correction: The technical term is when an investment such as a stock, mutual fund, or even entire financial markets fall by 10% or more from a recent peak. If you are using a market timing strategy, this is a time when the average investor either wants to buy stocks or other investments just prior so they can harvest gains at the end.Īs far as the origins of the term “bull market,” it’s thought that it was just a bestial foil to the term “bear market.” I think the bestial foil is Reynolds. The term “bear market” actually comes from an old proverb saying it’s unwise to “sell the skin of a bear before you catch it,” which evolved to describe short-selling as anticipating the market will go down.īull Market: A period when the market is experiencing an uptrend and stock prices are rising. More advanced traders may want to take this time to do some short-selling. Generally, you want to sell stocks or other investments just before it or just stay out of the market until it passes. The goal of the market timer is to buy an investment when they predict that the investment will increase in value and sell the investment before they think it will go down.īear Market: A period when the market trends downward. Market Timing: This is the practice of buying or selling investments based on a perception of where the market for either the investment or the market as a whole is heading. The market moves like the wind and even your financial advisor has no idea the next turn it will take. Speaking of fickle beasts, there are bull markets, bear markets, and constant market corrections, but knowing when any of them is coming is a fool’s errand.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |