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Using figures recently issued by a popular and well know money manager,
>history shows there is no wrong time to make an investment in the stock
>market. If a person started in 1987 and had made a $10,000 investment on
the
>market high in each of the past ten years, he would have $206,703. If he
>made that same $10,000 investment each year on the market lows, he would
have
>$263,480. Not that much difference overall.
Richard Estes said..
>If you had bought IBM at its 1987 high, it took 10 years to get even. During
that time you would have expericenced a 75 % drawdown on capital. If you
think the guy was right, next you go to darts. We don't buy the dow or
sp500. We buy stocks of all flavors. I wonder why he didn't talk about
treasury bills beating the sp500 from 1970-1994, it took you that long to
get even.<
Ahh yes, Richard, what you said about IBM is right. And the same can be said
about GM in 1929 and the same about T. But please note what I said. An
investment was made each year in the "market." Only 10% was put in the first
year and 10% each following year for a total of 10 years or $100,000. If you
want to use IBM as an example, then go back and average an investment each
year of the same dollar amount on the year's high and/or low in IBM....not
just one trade. I think you will be very much surprised. My reference was
to a long term investment program, not a hit or miss trading program.
>Being out of the market is the biggest risk.....which is where people
>generally are when trying to predict the market's next move. I think it is
>very ironic.
Richard further says....
>No not at all. Stocks are risky. I agree that we should worry about timing
the stocks we are in , not the market. But buy and hold can be suidice <
Trading in and out of stocks is the most risky of investment programs. Long
term diversified investment programs have much less risk and an incredibily
high success rate. Go back and study the market over 5 and 10 year periods.
You will find that the further you go back the more successful and less
risky long term investing is. Perhaps it is just the company I keep, but I
know many, many more successful long term investors than I do traders.
Trading is for fun....investing is for keeps!
Jerrry
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