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Dear Ira,
Aside from trading, I am concerned that you would not look at 10 year
periods at a minimum for any investment be it bonds, mutual funds,
stocks or what have you.
Most people,perhaps not you, retire with the hope of clipping coupons
or withdrawing a set amount from their investments annually with the
hope that they will survive their principal.
Sure there are a lot of ways to make money by trading innovatively in
a new market environment. But it is uncommon to have annual living
earnings for every year of trading.And some have illnesses which
prevent their active trading so they must teach. To each his own. But
to misinterpret the meaning of plotting past performance which covers
good and bad times is doing a disservice to sound financial
planning.And to plan you need to start from somewhere.
I have a set of mutual funds that survived a 7% withdrawal rate and
still doubled its remaining dollars from the three 10 year periods
from March:
1972 to 1982
1982 to 1992
1992 to 2002
That's my plan and to trade for bonus profits.I can also reallocate
if I desire. Others may have different plans and I am not saying my
way is the only way.
I trust you see the dichotomy of our thought patterns here.
John
------------------ Reply Separator --------------------
Originally From: "ira" <irat@xxxxxxxxx>
Subject: [RT] DOW and others
Date: 07/08/2002 10:11pm
I have read what everyone thinks about where this index or that will
be in 6 mos., a year, 10 years. Will it be like the 70s or something
different? What difference does it make where you think an index
will be in 10 years. You have no idea where you'll be in 10 years
let alone where the market will be. I have found that over the years
it pays to take the market a few bars at a time. That allows you to
select which few bars you wish to watch. Could it be monthly,
weekly, daily or one of the intra day charts? I don't know about
anyone else, but I made a lot of money in that so called stagnant
market of the 70s. There were those that got rich buy selling a
couple thousand dollars a day in naked calls and letting them expire
worthless. There were no puts at the time and the expirations where
3 months apart. Some sold stock short and watched companies go out
of business. There were dozens of other strategies that made money
during that period. There were many that made money going long
various instruments. There were dozens of mutual funds that just
disappeared. But that is not what counts for one that trades for a
living. The thing is to master the tools at ones disposal and make
money in any type of market. It doesn't make any difference if you
use Fib. numbers, forks, Gann, Eliot or the location of the planets.
There are more instruments to trade with today then at any other time
in the markets history. The name of the game for a trader is the
same as for any other business. Cash flow, not inventory. It
doesn't matter if you make 2 or 3 trades a month or 5 trades a day,
you need money to pay your bills at the end of the month. That has
nothing to do with where anything will be in 10 years or next year.
The key is where will price be when my trade is done and will there
be enough to pay the bills with. Ira
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