Thought I would just start a new thread instead of bringing the old one back from the dead. I am sitting mostly in cash for a month now. Watching and waiting to see what happens. Ran across this. Its easy to find correlations between stuff but its odd how closely this one has continued to track since it was identified. source http://www.marketwatch.com/story/scary-1929-market-chart-gains-traction-2014-02-11 I have been forced out of gold and silver 4 times now. I am looking closely now for a confirmed bottom. So far my bottom call from last June is holding in both gold and silver.
If you're afraid of occasional corrections maybe you shouldn't in the market. Trying to 'time' the market is for Pros, IMO. Maybe some index fund would suit you better. Me, my strategery is simple.......buy good growth stocks and hold 'em. Mix in some precious metals, some tech stuff for fun........Watch 'em grow and sell some when I need a new car. I'm so diversified I don't worry about what's up right now and what's down. I might go several days without even looking at the market. I've had some dogs but a lotta winnahs over the years. As I age I plan on moving more into equity generating stocks. 5-0
I do exactly opposite. I am not afraid of any correction. I can make money going up or down. I generally follow the market trend so if it turns then I am out. If it establishes a new trend down then I mostly short, if it continues to move up out of the correction then I look to go long on individual stocks. I do not follow intraday prices at all. I spend about an hour each night or morning deciding what to do Buying and holding indexes or broad funds has been for fools since 2000. what you think happened what really happened when it get adjusted for inflation. according to official CPI data inflation from Jan 00 to today is 2.1% and the DJIA has gained 2.34% since then. S&P or NASDAQ over that time and your losing money. This all assumes the generous CPI numbers for inflation and zero fees. Diversifying is for protecting wealth not growing it. I am still trying to make my money so my diversifying is limited to property and other hard assets I own overseas. Each to his own though.
You're also taking a lot of risks which may lose you money. Not a lot of people have the knowledge to "play" the market and win.
I've bought and held broadly diversified Contrafund since 2000. Below are my returns on each of my purchases since 2000 in my Roth IRA. The lines skipped are where dividend/capital gains distributions are reinvested making total returns even better. The current value is 210% of what I invested. War buy-and-hold dollar-cost-averaging. 2.80% -4.93% -2.87% 1.53% 5.90% 5.58% 11.69% 7.55% 12.73% 14.14% 19.41% 18.22% 24.06% 23.11% 24.04% 20.60% 23.46% 27.80% 29.92% 28.75% 22.89% 22.10% 27.80% 35.10% 40.49% 45.13% 40.47% 47.25% 46.53% 31.00% 39.66% 35.04% 32.49% 36.53% 34.62% 38.36% 40.88% 44.12% 47.44% 53.39% 69.91% 61.90% 65.30% 70.33% 52.40% 59.00% 67.01% 69.26% 62.85% 68.58% 71.67% 75.37% 83.68% 88.72% 99.32% 102.11% 114.54% 119.27% 137.47% 125.07% 117.14% 115.04% 125.26% 60.98% 51.10% 51.79% 44.24% 38.55% 40.23% 46.60% 43.06% 45.84% 21.82% 28.93% 22.08% 26.85% 35.46% 35.28% 37.18% 36.92% 39.35% 44.34% 43.41% 44.91% 46.85% 36.52% 37.23% 43.98% 45.35% 47.47% 47.82% 44.60% 39.83% 44.11% 44.56% 41.29% 47.09% 45.73% 54.34% 52.27% 57.66% 57.28% 62.67% 66.08% 71.39% 68.61% 65.39% 72.39% 69.53% 71.86% 83.42% 86.39% 91.12% 94.02% 83.80% 87.38% 83.19% 90.43% 88.37% 88.07% 96.23% 99.13% 105.35% 115.46% 117.10% 118.47% 124.92% 132.63% 141.63% 150.33% 160.21% 157.61% 145.56% 149.87% 141.71% 144.72% 136.14% 132.32% 118.34% 114.75% 70.52% 66.47%
Maybe I am not understanding what you posted but given this your annualized ROI is 5.39%. So thats 3.29% annual gain after inflation. That kinda makes my point given that it also includes dividend returns that are reinvested.
I believe your calculation is treating my investments as if I bought all shares in 2000. I've added the dates of purchase, followed by the present value, the percent gain, and the amount of original investment. $0.00 investment means it is a capital gains/dividends distribution. Acquired: 02/07/2014 $968.66 $0.00 1/27/2014 $456.51 3.75% $440.00 12/13/2013 $6,332.28 $0.00 11/26/2013 $422.15 -4.06% $440.00 10/28/2013 $431.29 -1.98% $440.00 9/26/2013 $450.83 2.46% $440.00 8/26/2013 $470.27 6.88% $440.00 7/26/2013 $468.83 6.55% $440.00 6/26/2013 $495.97 12.72% $440.00 5/28/2013 $477.59 8.54% $440.00 4/26/2013 $500.59 13.77% $440.00 3/26/2013 $506.85 15.19% $440.00 2/26/2013 $530.24 20.51% $440.00 2/8/2013 $749.98 $0.00 1/28/2013 $524.94 19.31% $440.00 12/26/2012 $438.22 25.21% $350.00 12/14/2012 $872.31 $0.00 11/26/2012 $434.85 24.24% $350.00 10/26/2012 $438.13 25.18% $350.00 9/26/2012 $426.00 21.72% $350.00 8/27/2012 $436.10 24.60% $350.00 7/26/2012 $451.41 28.98% $350.00 6/26/2012 $458.92 31.12% $350.00 5/29/2012 $454.78 29.94% $350.00 4/26/2012 $434.08 24.02% $350.00 3/26/2012 $431.29 23.23% $350.00 2/27/2012 $451.41 28.98% $350.00 1/26/2012 $477.20 36.35% $350.00 12/28/2011 $4.42 $0.00 12/27/2011 $496.26 41.79% $350.00 12/16/2011 $110.78 $0.00 11/28/2011 $512.62 46.46% $350.00 10/26/2011 $496.16 41.76% $350.00 9/26/2011 $371.52 48.61% $250.00 8/26/2011 $369.69 47.88% $250.00 7/26/2011 $330.52 32.21% $250.00 6/27/2011 $352.37 40.95% $250.00 5/26/2011 $340.72 36.29% $250.00 4/26/2011 $334.27 33.71% $250.00 3/28/2011 $344.47 37.79% $250.00 2/28/2011 $339.66 35.87% $250.00 2/4/2011 $85.95 $0.00 1/26/2011 $349.09 39.64% $250.00 12/27/2010 $355.45 42.18% $250.00 12/17/2010 $313.39 $0.00 11/26/2010 $363.63 45.45% $250.00 10/26/2010 $372.00 48.80% $250.00 9/27/2010 $387.02 54.81% $250.00 8/26/2010 $428.69 71.48% $250.00 7/26/2010 $408.48 63.39% $250.00 6/28/2010 $417.05 66.82% $250.00 5/26/2010 $429.75 71.90% $250.00 4/26/2010 $384.51 53.81% $250.00 3/26/2010 $401.17 60.47% $250.00 2/26/2010 $421.38 68.55% $250.00 2/5/2010 $107.12 $0.00 1/26/2010 $427.06 70.82% $250.00 12/28/2009 $410.89 64.36% $250.00 12/18/2009 $206.55 $0.00 11/27/2009 $425.32 70.13% $250.00 10/26/2009 $433.12 73.25% $250.00 9/28/2009 $442.46 76.98% $250.00 8/26/2009 $463.44 85.38% $250.00 7/27/2009 $476.14 90.46% $250.00 6/26/2009 $502.90 101.16% $250.00 5/26/2009 $509.93 103.97% $250.00 4/27/2009 $541.31 116.52% $250.00 3/26/2009 $553.24 121.30% $250.00 2/26/2009 $599.15 139.66% $250.00 2/13/2009 $20.69 $0.00 1/26/2009 $567.87 127.15% $250.00 12/26/2008 $277.48 $0.00 12/26/2008 $547.85 119.14% $250.00 11/26/2008 $542.56 117.02% $250.00 10/27/2008 $568.35 127.34% $250.00 9/26/2008 $406.17 62.47% $250.00 8/26/2008 $381.24 52.50% $250.00 7/28/2008 $382.97 53.19% $250.00 6/26/2008 $363.92 45.57% $250.00 5/27/2008 $349.58 39.83% $250.00 4/28/2008 $353.81 41.53% $250.00 3/26/2008 $369.88 47.96% $250.00 2/26/2008 $360.93 44.38% $250.00 2/8/2008 543.52 $0.00 1/28/2008 $367.96 47.19% $250.00 12/28/2007 $2,892.60 $0.00 12/26/2007 $265.55 22.94% $216.00 11/26/2007 $281.05 30.12% $216.00 10/26/2007 $266.13 23.21% $216.00 9/26/2007 $276.52 28.02% $216.00 8/27/2007 $295.29 36.71% $216.00 7/26/2007 $294.91 36.53% $216.00 6/26/2007 $299.04 38.45% $216.00 5/29/2007 $298.47 38.18% $216.00 4/26/2007 $303.76 40.63% $216.00 3/26/2007 $314.64 45.67% $216.00 2/26/2007 $312.62 44.73% $216.00 2/2/2007 $469.89 $0.00 1/26/2007 $315.89 46.25% $216.00 12/26/2006 $320.12 48.21% $216.00 12/22/2006 $3,648.54 $0.00 11/27/2006 $297.60 37.78% $216.00 10/26/2006 $299.14 38.49% $216.00 9/26/2006 $313.87 45.31% $216.00 8/28/2006 $316.85 46.69% $216.00 7/26/2006 $321.47 48.83% $216.00 6/26/2006 $322.24 49.19% $216.00 5/26/2006 $315.21 45.93% $216.00 4/26/2006 $304.82 41.12% $216.00 3/27/2006 $314.16 45.44% $216.00 2/27/2006 $315.12 45.89% $216.00 2/3/2006 $746.70 $0.00 1/26/2006 $308.00 42.59% $216.00 12/27/2005 $259.77 48.45% $175.00 12/23/2005 $673.94 $0.00 11/28/2005 $257.37 47.07% $175.00 10/26/2005 $272.58 55.76% $175.00 9/26/2005 $268.92 53.67% $175.00 8/26/2005 $278.45 59.11% $175.00 7/26/2005 $277.77 58.73% $175.00 6/27/2005 $287.30 64.17% $175.00 5/26/2005 $460.94 67.62% $275.00 4/26/2005 $475.66 72.97% $275.00 3/28/2005 $467.96 70.17% $275.00 2/28/2005 $459.01 66.92% $275.00 2/4/2005 $5.87 $0.00 1/26/2005 $478.45 73.99% $275.00 12/27/2004 $427.73 71.09% $250.00 12/23/2004 $20.21 $0.00 11/26/2004 $433.60 73.44% $250.00 10/26/2004 $462.77 85.11% $250.00 9/27/2004 $470.27 88.11% $250.00 8/26/2004 $482.21 92.89% $250.00 7/26/2004 $489.52 95.81% $250.00 6/28/2004 $463.73 85.49% $250.00 5/26/2004 $472.78 89.11% $250.00 4/26/2004 $462.19 84.88% $250.00 3/26/2004 $480.48 92.19% $250.00 2/26/2004 $475.28 90.11% $250.00 2/6/2004 $5.58 $0.00 1/26/2004 $474.51 89.81% $250.00 12/26/2003 $495.11 98.04% $250.00 12/26/2003 $22.13 $0.00 11/26/2003 $502.42 100.97% $250.00 10/27/2003 $518.11 107.25% $250.00 9/26/2003 $543.62 117.45% $250.00 8/26/2003 $547.75 119.10% $250.00 7/28/2003 $551.22 120.49% $250.00 6/26/2003 $567.49 127.00% $250.00 5/27/2003 $586.93 134.77% $250.00 4/28/2003 $609.64 143.86% $250.00 3/26/2003 $631.59 152.64% $250.00 2/26/2003 $656.52 162.61% $250.00 1/27/2003 $649.97 159.99% $250.00 12/27/2002 $26.75 $0.00 12/26/2002 $619.56 147.82% $250.00 11/26/2002 $630.43 152.17% $250.00 10/28/2002 $609.84 143.94% $250.00 9/26/2002 $617.44 146.98% $250.00 8/26/2002 $595.78 138.32% $250.00 7/3/2002 $586.16 134.47% $250.00 12/28/2001 $85.95 $0.00 7/30/2001 $2,203.54 120.35% $1,000.00 7/2/2001 $1,517.09 116.73% $700.00 12/29/2000 $57.55 $0.00 12/29/2000 $1,234.98 $0.00 7/28/2000 $1,548.85 72.09% $900.00 6/29/2000 $1,848.09 68.01% $1,100.00
You've used a pretty small window of time for the purchase of funds to justify your position that they are a fool's game. We've had two pretty deep recessions in the last 15 years. I don't think anyone is saying that you'll come out rosy if you bought everything in 2000 or 2007. Most people didn't put their entire nest egg into the market right at those times. For many of us our biggest investments are our 401k plans. We bought some of the funds before the late '90s runup and bought regularly since 2000. Our return looks a lot better than the charts you provided. If you can time the market then power to you. It's easy to say you'll short on a downward trend but recognizing a downward trend isn't as easy as it seems in hindsight.
I've been in this industry for over 20 years, and I assure you that statement is incorrect for about 95% of investors out there.
I know very little about the markets, but isn't buying and holding how Buffett got where he is? Jus askin....
I do the Dave Ramsey thing. Got my money split between 4 types of stock (don't ask me cause IDGAF) but I think it's high-risk fast growth, low-risk, international, and something else. From what I understand my money is spread out between ~800 different options. I'm following his advice to let it ride. In the past 40 years his way of investing has averaged over 10%, and that's good enough for me.
Heh. I still do that too. What I've invested is money I don't need till later. The mason jars are there if I need it now. Like for the ****ing IRS. Over $14,000 this year - and that's after almost $100,000 in farm losses.
Regarding the scary chart. While the pattern matches, the percent increases and decreases don't match at all. For example, an index increasing from 200 to 300 (50% increase) is much more significant than an increase from 13200 to 15600 (18% increase).
Ok, I can agree with that statement. I was directing that toward the people that actually work at investing their money.
Out of curiosity, why growth stocks? Buy and Hold is typically used with value stocks (ie the Warren Buffett model). My wife's strategy is also ridiculously effective -> only buy stocks of companies with addictive products. Her ROI on Activision/Blizzard alone (the makers of WoW) is almost 100% in a year.
As for the rest of the post, I've been basically sitting things out because most sectors are way overpriced (especially frickin health care, omg). As a value stock, buy and hold guy, there are only 2 sectors with reasonable prices -> energy and pacific rim stocks. The best value common stocks in energy are OneOK and BP, but I'm leery of both of them. The only other thing that I found was Chesapeake's preferred stock which is north of 8%.
