[quote]The Mage wrote:
on edge wrote:
Do you have a sign on you back that says “kick me”? Because you’re making yourself to be a big punching bag.
Wow, that is like, such a stupid comment. Thanks for bringing that level of intelligence to this conversation.
No, I was clearly comparing peak to peak not peak to valley. Peak to valley comparisons would be quite sobering, though.
When you get to choose your time frame, of course it will look exactly how you want it to. September 1993 to September 2000 it was up 212%. Pick October 2002 to October 2007, you have an 87% return.
Ten years the S&P has gone from 1000 to 1200. That sucks Figure ones investment life is about 30 years. That ten years practically wasted. Six years, 900 to 1200. That’s a meek “ok”. I could take it but not be thrilled.
I wasn’t calling this some wonderful exciting investment. Spend 10 years building through dollar cost averaging, then when it does go up, which it will, you will make the profit. Give it the 30 years, and it will do fine.
I am not calling this the great sophisticated investment. It is simply the starting point of a core buy and hold strategy.
Dollar cost averaging over this time really hasn’t done you that well,either. Probably around the ten year result.
It’s actually surprising at how well it actually works. Boring, but works.
You say “with the market down right now” like this may be a valley. If you are right, we should be throwing our money at the market. However, it is more likely we are just coming off a major peak. If history is any indicator, this down trend in stock values will continue for at least another year.
We have entered the valley, in November of 2007, but it has not bottomed out. You can either buy on the way down, or wait until it bottoms out. I am not psychic, so I cannot say when that bottom will occur. But a chart will often show when it has happened, and a person can respond to it.
I’m saving cash, buying foreign bond funds, probably will be buying gold and, when the market gets extremely oversold like it was midweek last week, I will take some pot shots at it by buying volatile index funds and hopefully selling them with in a few weeks. I sold what I bought last week in a day and a half. The less time to get blind sided by bad news, the better.
So basically you are a day trader. No problem with that, as long as you know what your doing. (And at least 90% of the day traders don’t) Too many fall for the gambling nature involved, so it draws in a lot of compulsive gamblers who call themselves investors.
I also put lots of money in this very safe fund; HSGFX. You young guys who really aren’t sure what to do with your investment money HSGFX. Those of you who really believe in dollar cost averaging ---->HSGFX<-----.
Mage, based on your comments above, please consider HSGFX.
Looks like an interesting fund. But the S&P has beat it over the last 5 years, so I don’t see the point.[/quote]
Mage, I give you credit for figuring out how to do the line by line quoting and responding. I still haven’t figured that one out. The only thing I can think of is to open two pages and cut & paste. Seems like too much effort.
That is the only thing good about your post though, because everything you said is wrong. Except that dollar cost averaging is good, that is mostly true.
I clearly explained how I’m investing and I’m clearly not a Day Trader. There are rare occasions I engage in trading but it would not be called day trading. I think you are trying to attach that label to me because it carries a stigma of being reckless. What I decribed about my investing is obviously a very caucious approach. The equities I recently traded are equities that people like you would be suggesting to buy and hold anyway. Instead I sold them so I would have the profits but not the worry.
You are right, if you choose your time frame, you can show just about anything you want. I chose peak to peak for two reasons. One, we are just coming off a peak, and two, it shows a full market cycle. Trough to trough would work to show the full market cycle as well.
By comparing Hussman to S&P 500 over 5 years, you are the one picking your dates. Compare them peak to peak or trough to trough for a comparison that is truly meaningful. By the way, if you are comparing Hussman with the S&P 500 using a chart, it is misleading. Hussman distributes capital gains around this time every year. You will notice there is a steep drop in the share price at the end of each year. You would need to adjust for this in your comparison.
You said “We have entered the valley, in November of 2007, but it has not bottomed out. You can either buy on the way down, or wait until it bottoms out. I am not psychic, so I cannot say when that bottom will occur. But a chart will often show when it has happened, and a person can respond to it.”
None of us are psychic but as I said before, history tells us we’ve got at least a year to go before we see the bottom. Maybe for the first time ever this time will be different. I’m not going to bet my hard earned assets on it. Someone who has had the dollar cost averaging approach should continue that approach. Anyone looking to get started in the market should save their money and wait for a better time. Or see Mr. Hussman as he won’t lose your money.