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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 683.04-0.1%Dec 9 4:00 PM EST

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To: Fun-da-Mental#1 who wrote (35304)12/16/1999 3:34:00 PM
From: Jacob Snyder  Read Replies (1) of 99985
 
Investors expect 30% yearly returns,

because the market has averaged 30% returns/year over the last 4 years. Investors will ignore the fact that, over the last century, returns average only 10%. Short-term recent patterns are given more weight in decision-making, than long-term patterns. That is true in spite of the fact that long-term patterns are always more reliable. And investors won't change their minds until the market goes down and stays down. A 30% decline, sustained over at least 6 months, will be required, before investors (professionals included) question 1999's Investing Principles:

1. Buy high, sell higher
2. momentum stocks go up, value stocks go down
3. the only risk is missing the party
4. the more leveraged you are, the better your returns
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