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To me it seems that hardest part about predictions is the timing. It's not too hard to understand the macro economic trends and to see which way the wind is bl

To me it seems that hardest part about predictions is the timing. It's not too hard to understand the macro economic trends and to see which way the wind is blowing, but it's very hard to know when it will happen and how quickly it will happen. That's why day trading is gambling. The long term buy and hold, and the averaging down strategies will make you money, as long as you understand mid to long term direction of the economy and invest accordingly.

sogood 16y ago
Markets can remain irrational longer than you can remain solvent. -- Keynes.
tygorius 16y ago
Actually if there's any one lesson to be learned from the last dozen years of the stock market's swings, it is that "buy and hold" is dead as a useful investment strategy. As to gambling vs. trading, there's a whole industry of people who train traders in eliminating the gambling psychology that can destroy equity so quickly. A short time frame only exacerbates the psychological weakness. Oddly enough successful day traders, that is, those who hold their positions for mere minutes and close out all positions by the close of the trading day, are about as far from gamblers (in a psychological sense) as you can get.
- noelchurchill 16y ago
  Actually if there's any one lesson to be learned from the last dozen years of the stock market's swings, it is that "buy and hold" is dead as a useful investment strategy. I might have misused the term buy and hold. I meant to ignore the intraday swings and keep your eyes on the overlying trends. I certainly don't think you can blindly hold an index fund these days and plan on retiring on it.
  - me_again 16y ago
    My 401K's in a 'LifePath' fund- more-or-less an index tracker which shifts more weight from a stock index funds into bonds as your nominal retirement day approaches. It's quite possible I'll come to regret it, but I can't think of a safer approach.
- ghshephard 16y ago
  Look back over the last ninety years - "Buy and Hold" hasn't been that great a strategy either. http://www.nytimes.com/interactive/2011/01/02/business/20110102-metrics-graphic.html http://www.nytimes.com/interactive/2011/01/02/business/20110...

sogood 16y ago

Markets can remain irrational longer than you can remain solvent. -- Keynes.

tygorius 16y ago

Actually if there's any one lesson to be learned from the last dozen years of the stock market's swings, it is that "buy and hold" is dead as a useful investment strategy. As to gambling vs. trading, there's a whole industry of people who train traders in eliminating the gambling psychology that can destroy equity so quickly. A short time frame only exacerbates the psychological weakness. Oddly enough successful day traders, that is, those who hold their positions for mere minutes and close out all positions by the close of the trading day, are about as far from gamblers (in a psychological sense) as you can get.

noelchurchill 16y ago
Actually if there's any one lesson to be learned from the last dozen years of the stock market's swings, it is that "buy and hold" is dead as a useful investment strategy. I might have misused the term buy and hold. I meant to ignore the intraday swings and keep your eyes on the overlying trends. I certainly don't think you can blindly hold an index fund these days and plan on retiring on it.
- me_again 16y ago
  My 401K's in a 'LifePath' fund- more-or-less an index tracker which shifts more weight from a stock index funds into bonds as your nominal retirement day approaches. It's quite possible I'll come to regret it, but I can't think of a safer approach.
ghshephard 16y ago
Look back over the last ninety years - "Buy and Hold" hasn't been that great a strategy either. http://www.nytimes.com/interactive/2011/01/02/business/20110102-metrics-graphic.html http://www.nytimes.com/interactive/2011/01/02/business/20110...