Puddy Posted July 14, 2006 Share Posted July 14, 2006 Don't try to time the market. Invest regularly and the cost averaging thingy works wonders for you. If you're in the stock market heavily, then you are a long-term investor and shouldn't concern yourself with these types of dips. If you aren't a long-term investor, you shouldn't be in the market heavily. Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted July 14, 2006 Share Posted July 14, 2006 yep....remember, its long term. might be down this week, but you dont need it for another 20years. I need it in 11 years - I intend to finish working at 60. However, that looks less likely by the day. Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted July 14, 2006 Share Posted July 14, 2006 I guess at least any new shares will be bought low. I'm a fan of dollar cost averaging. I don't look at my stuff until I get the statement at the end of the month, or unless my money manager calls with a question. Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted July 14, 2006 Share Posted July 14, 2006 I need it in 11 years - I intend to finish working at 60. However, that looks less likely by the day. Follow up to this.....although I may have to continue to work after 60, it'll be on my terms. No mortgage, no kids, so I'll probably be into self-employed consultancy by then, working when I want to. Quote Link to comment Share on other sites More sharing options...
TDFFFreak Posted July 14, 2006 Share Posted July 14, 2006 The DJIA is breakeven for the year. The S&P500 is barely down. The Nasdaq Composite is down a few %. Yes, they're down quite a bit since their April highs, but this isn't scary! Scary was a couple of years ago. This is not scary. Calm down. Good advice here. Now might be a good time to buy. Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted July 14, 2006 Share Posted July 14, 2006 Don't try to time the market. Invest regularly and the cost averaging thingy works wonders for you. If you're in the stock market heavily, then you are a long-term investor and shouldn't concern yourself with these types of dips. If you aren't a long-term investor, you shouldn't be in the market heavily. you know, in the gummit, we've only got like 5 different funds to choose from. i've got all mine going into the three most agressive ones. over the weekend i was thinking i ought to maybe put at least 25% or so into the government securities fund. monday i was sitting there filling out the change form and thought eh, maybe now is not the time. woulda saved me at least a few hundred bucks in losses this week, but, yeah, short term dips and peaks aren't really worth worrying about too much. Quote Link to comment Share on other sites More sharing options...
devilwoman Posted July 14, 2006 Share Posted July 14, 2006 Don't try to time the market. Invest regularly and the cost averaging thingy works wonders for you. If you're in the stock market heavily, then you are a long-term investor and shouldn't concern yourself with these types of dips. If you aren't a long-term investor, you shouldn't be in the market heavily. yep long term indeed...but I do watch it on a weekly basis.... Quote Link to comment Share on other sites More sharing options...
Coffeeman Posted July 14, 2006 Share Posted July 14, 2006 I guess at least any new shares will be bought low. Now THERE'S a glass half full guy! I just cashed out a small Roth IRA last week ($100 tax hit, big wup) to pay off some debt and buy a small car for cash. I agonized, but now very glad I did it... Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted July 14, 2006 Share Posted July 14, 2006 you know, in the gummit, we've only got like 5 different funds to choose from. i've got all mine going into the three most agressive ones. over the weekend i was thinking i ought to maybe put at least 25% or so into the government securities fund. monday i was sitting there filling out the change form and thought eh, maybe now is not the time. woulda saved me at least a few hundred bucks in losses this week, but, yeah, short term dips and peaks aren't really worth worrying about too much. We have 10 funds through a major bank and I've got mine mostly in the two most aggressive ones and the rest in medium-aggressive. I figure with 11 years to go I can afford to ride it out and the historical trend would indicate that being aggressive now will pay off. I will most likely reassess this when I have five years to go and start salting away into less turbulent waters. Quote Link to comment Share on other sites More sharing options...
MikesVikes Posted July 14, 2006 Share Posted July 14, 2006 Don't try to time the market. Invest regularly and the cost averaging thingy works wonders for you. If you're in the stock market heavily, then you are a long-term investor and shouldn't concern yourself with these types of dips. If you aren't a long-term investor, you shouldn't be in the market heavily. I don't have a problem with getting out of the market when it has no place to go but down. It's not much different than playing Tomlinson in your lineup when he has a bye week. For most of the season, he'll do wonders for you, but this one week he won't for sure. Quote Link to comment Share on other sites More sharing options...
Puddy Posted July 14, 2006 Share Posted July 14, 2006 (edited) I don't have a problem with getting out of the market when it has no place to go but down. It's not much different than playing Tomlinson in your lineup when he has a bye week. For most of the season, he'll do wonders for you, but this one week he won't for sure. STUDIES PROVE MARKET TIMING DOES NOT WORK A note about "timing". We believe in concepts such as taking profits, buying low and selling high and taking advantage of market conditions. However, the concept of timing - the ability to move in and out of markets and sectors to follow upturns and avoid downturns is nearly impossible. Studies back up this view as you will read below: Study #1 One well known study looked at the returns for the Standard & Poor's 500 between 1926 and 1987. The Standard & Poor's 500 is simply an "index" of 500 of the largest companies traded in the United States. Mutual funds are frequently compared to the Standard & Poor's 500 index as a way of evaluating the performance of the mutual fund manager. It is a widely used gauge of the "stock market" as a whole. The authors found that the S&P 500 returned on average just less than 10% (9.44%) each year during the 62 years from 1926 through 1987, inclusive. They then looked at the market return by months and found two interesting things. First, there were 744 months during those 62 years. Amazingly, all of the market's increase over those 62 years happened in just 50 months. In other words, miss just 50 of the best gaining months out of the 744 months between 1926 and 1987 and your average annual return would have been 0% instead of 9.44%. Second, they found that most of each year's gain occurred in just one out of the 12 months each year. On average, the stock market increased an average of 8.68% during the best month in each of the 62 years from 1926-1987. In stark contrast, the market went up an average of just .76% during the remaining 11 months the year. Again, miss the best month out of the 12 months each year and your gain falls to nearly nothing compared to the nearly 10% average annual return you could have had by just buying and holding stocks.See Chandy and Reichenstein, "Timing Strategies and the Risk of Missing Bull Markets," AAII Journal, Vol. XII, No. 12 (Aug. 1991). Edited July 14, 2006 by Puddy Quote Link to comment Share on other sites More sharing options...
muck Posted July 14, 2006 Share Posted July 14, 2006 ...blah blah blah blah... ...explain that "you can't beat the market" to my friend / associate who's made 26% / yr for the past 17 years on a portfolio of (currently) $500,000,000 ... or my other friend / associate who's made >30% / yr for the past 12 years on a portfolio of (currently) $500,000,000 ... or my friend / associate who has made money each and every month for the past 49 months on a portfolio of (currently) $165,000,000 ... Studies are good for theory and general education. They are (generally) bad for actually making money. Lots of people can beat the market in the short term, but it takes insight, skill and patience to beat the market over a long period of time. It can be done ... just not by everyone. Can I get an amen? GTB? RWings? PS - Jumpin Jonnies will be here any minute to tell me I don't know what I'm talking about? Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted July 14, 2006 Share Posted July 14, 2006 ...blah blah blah blah... ...explain that "you can't beat the market" to my friend / associate who's made 26% / yr for the past 17 years on a portfolio of (currently) $500,000,000 ... or my other friend / associate who's made >30% / yr for the past 12 years on a portfolio of (currently) $500,000,000 ... or my friend / associate who has made money each and every month for the past 49 months on a portfolio of (currently) $165,000,000 ... Studies are good for theory and general education. They are (generally) bad for actually making money. Lots of people can beat the market in the short term, but it takes insight, skill and patience to beat the market over a long period of time. It can be done ... just not by everyone. Can I get an amen? GTB? RWings? PS - Jumpin Jonnies will be here any minute to tell me I don't know what I'm talking about? Send at least one of your friends to work for my bank's 401k department. Quote Link to comment Share on other sites More sharing options...
muck Posted July 14, 2006 Share Posted July 14, 2006 (edited) Send at least one of your friends to work for my bank's 401k department. ...uhhh... Something tells me your bank doesn't pay enough. PS - Those returns are after the manager gets paid a 1% management fee and 20% of all profits. So, for the investor to get 30% the manager needs to generate 38.5% ... less a 1% management fee to 37.5% ... less 20% of profits results in a 30% NET return. So, if he puts up a 30% net return on a $500,000,000 portfolio, my friend will make $40-45 million for the year (before he pays employees and his operating expenses). Does your bank pay like that? PPS - There is a widely known manager who charges a 4% management fee (iirc) and 44% of profits and still returns 30-40% / yr to his investors (and has for a VERY long time (James Simon at Renassaince Technologies). Its rumored that he can be as much as 10% of the daily trading volume on the NYSE. Another VERY large manager charges 50% of profits and returns 30-40% / yr and has for a very long time (Stevie Cohen at SAC Capital). Both of these guys manage billions. We're not invested with either of these guys, but we are with the three other guys mentioned above. Edited July 14, 2006 by muck Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted July 14, 2006 Share Posted July 14, 2006 one fairly simple, slow, long term factor my intuition says might be worth paying attention to (and investing accordingly) is the raising and lowering of fed rates. it's not too hard to predict how those are going to go long term...i mean, if they're really low (like a couple years ago) they're going to go higher, and if they're high they're going to go lower. and the way that impacts the market, well it's obviously complicated, but it seems to me (again, just intuitively, i am most likely talking out of my ass) that when rates are low stocks may be a little overvalued and when rates are high stocks may be a little undervalued. so like right now, rates are either as high or almost as high as they're going to be getting for a while, might be a good time to own stocks. it's somewhat counter-intuitive because the fed has rates high when they think the economy is strong enough to handle it, and they only lower rates when it looks like the economy may be headed for a rough spot. Quote Link to comment Share on other sites More sharing options...
jetsfan Posted July 14, 2006 Share Posted July 14, 2006 Uhhh... US = owns lots of oil US = stands to make money if oil prices go up a little bit US = funds Hezbolla US = already involved ... they don't need to fire anything ... they're already "in" fixed Quote Link to comment Share on other sites More sharing options...
Puddy Posted July 14, 2006 Share Posted July 14, 2006 Well if you're willing to gamble and can find the 'right' investor, then yes you can beat the market. The average Huddler who decides to take his money out of the market for a week may not be as successful. Quote Link to comment Share on other sites More sharing options...
muck Posted July 14, 2006 Share Posted July 14, 2006 one fairly simple, slow, long term factor my intuition says might be worth paying attention to (and investing accordingly) is the raising and lowering of fed rates. it's not too hard to predict how those are going to go long term...i mean, if they're really low (like a couple years ago) they're going to go higher, and if they're high they're going to go lower. and the way that impacts the market, well it's obviously complicated, but it seems to me (again, just intuitively, i am most likely talking out of my ass) that when rates are low stocks may be a little overvalued and when rates are high stocks may be a little undervalued. so like right now, rates are either as high or almost as high as they're going to be getting for a while, might be a good time to own stocks. it's somewhat counter-intuitive because the fed has rates high when they think the economy is strong enough to handle it, and they only lower rates when it looks like the economy may be headed for a rough spot. There is something to it, except there is a bit of a lag-effect. Low rates today mean that in a year or two AFTER rates start going up the market will be (possibly) overvalued ... high rates today mean that in a year or two after rates start going down the market will (possibly) be undervalued. Although, out and out value doesn't necessarily determine when it's a good time to invest. Just because something is cheap doesn't mean it can't get cheaper. Lower prices bring sellers, higher prices bring buyers...until an extreme is hit, then the reverse is true. Quote Link to comment Share on other sites More sharing options...
muck Posted July 14, 2006 Share Posted July 14, 2006 Well if you're willing to gamble and can find the 'right' investor, then yes you can beat the market. The average Huddler who decides to take his money out of the market for a week may not be as successful. Gamble? All of life is a gamble, son. BTW, dollar cost averaging IS nothing more than a systematic form of market timing. ...chew on that one for a while... Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted July 14, 2006 Share Posted July 14, 2006 I, Ursa, attest that I properly understand virtually nothing of this thread but continue to throw $1,000 a month into my funds in the hope that at the end of the ride I'll have made money. And I suspect 90% of the rest of the people contributing to their 401k are in the same boat. Quote Link to comment Share on other sites More sharing options...
muck Posted July 14, 2006 Share Posted July 14, 2006 I, Ursa, attest that I properly understand virtually nothing of this thread but continue to throw $1,000 a month into my funds in the hope that at the end of the ride I'll have made money. And I suspect 90% of the rest of the people contributing to their 401k are in the same boat. ...and I suspect yer right. This is a good example why I go to a mechanic, a chiropractor and a dentist. I don't know anything about that stuff, so they help me out. Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted July 14, 2006 Share Posted July 14, 2006 ...blah blah blah blah... ...explain that "you can't beat the market" to my friend / associate who's made 26% / yr for the past 17 years on a portfolio of (currently) $500,000,000 ... or my other friend / associate who's made >30% / yr for the past 12 years on a portfolio of (currently) $500,000,000 ... or my friend / associate who has made money each and every month for the past 49 months on a portfolio of (currently) $165,000,000 ... Studies are good for theory and general education. They are (generally) bad for actually making money. Lots of people can beat the market in the short term, but it takes insight, skill and patience to beat the market over a long period of time. It can be done ... just not by everyone. Can I get an amen? GTB? RWings? PS - Jumpin Jonnies will be here any minute to tell me I don't know what I'm talking about? I hear you. My money managers has been getting me an average annual retrun of over 24% in each of the last 3 years, which I think most would agree is pretty good considering the market has been going side ways for a while now. Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted July 14, 2006 Share Posted July 14, 2006 ...and I suspect yer right. This is a good example why I go to a mechanic, a chiropractor and a dentist. I don't know anything about that stuff, so they help me out. So, I wonder if it would be worth someone like me pulling out of the mass 401k deal and going to a proper money manager? Probably lose the pre-tax benefit, but the performance overall would likely make up for that. My bank claim to have a 401k managed option which is pretty inexpensive but you have to have your money in a particular proportion of fund types and it was too conservative for me, so I just did it myself. Problem is that the 401k funds themselves aren't that wonderful, I don't think, but I don't really have a proper frame of reference. Like I said, I don't have enough knowledge in the investment arena, like most people. Quote Link to comment Share on other sites More sharing options...
dmarc117 Posted July 14, 2006 Author Share Posted July 14, 2006 ...blah blah blah blah... ...explain that "you can't beat the market" to my friend / associate who's made 26% / yr for the past 17 years on a portfolio of (currently) $500,000,000 ... or my other friend / associate who's made >30% / yr for the past 12 years on a portfolio of (currently) $500,000,000 ... or my friend / associate who has made money each and every month for the past 49 months on a portfolio of (currently) $165,000,000 ... Studies are good for theory and general education. They are (generally) bad for actually making money. Lots of people can beat the market in the short term, but it takes insight, skill and patience to beat the market over a long period of time. It can be done ... just not by everyone. Can I get an amen? GTB? RWings? PS - Jumpin Jonnies will be here any minute to tell me I don't know what I'm talking about? im going to have say "bullsh!t" Quote Link to comment Share on other sites More sharing options...
wiegie Posted July 14, 2006 Share Posted July 14, 2006 (edited) Do any of the financial/money managers who have figured out how to beat the market guarantee at least the market return (over some specified time period) to the people who put their money with them? Edited July 14, 2006 by wiegie Quote Link to comment Share on other sites More sharing options...
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