5 ms·
This "trivia" points out the flaw in the "long term average" argument: The stock market is occasionally so volatile that 40 days out of 34,675 have an inordinat
by PeterWhittaker 5y ago
This "trivia" points out the flaw in the "long term average" argument: The stock market is occasionally so volatile that 40 days out of 34,675 have an inordinate effect on returns over those 34,675 days.
Over 95 years of trading, 0.12% of days account for far, far, far, far more than 0.12% of market impacts.
- dasil003 5y agoYeah so what are you going to do about it?
- pc86 5y agoWhat kind of argumentative nonsense comment is this?
- randoramax 5y agoI think it's a legitimate question: we all have a large chunk of savings stuck in this game because of perverse incentives set by corrupt/inept US gov. Now what?
- dasil003 5y agoThe point is that of course there are the outlier days that disproportionately affect gains/losses, that doesn't invalidate the long-term average argument though unless you have some way of identifying those periods in advance. If you could do that then you A) would not tell anyone until B) the SEC came knocking at your door to explain how you turned $1k into $1B over a very short time span.
- hattmall 5y agoHedge with options. You can even out the highs and lows, make your returns predictable with in a tight window and act accordingly.