Diamond,
Firstly swing trading(Im not talking about scalping) is not for everyone, since not everyone wants to short, and to me swing trading means going both directions.
>>>> I'm planning on 10-15%/year on the big blue chips and 20-25%/year on techs (with selected issues doing better).<<<
Frankly, thats very reasonable, and actually Im expecting more. Lets just take it from a FIBONACCI viewpoint. The NDX got as high around 4900 and got as low as 1350, which is a selloff of about 3550 NDX points. FIB 38% of 3550 is 1330 NDX points which is about 100% right there. And with good stock picking I feel that could easily be exceeded on a total portfolio basis. So I do think that a buy and hold strategy is becoming more viable as the market drops.
As a swing trader, I believe that your price targets can be exceeded even more easily. I prefer not to go into all my details, but lets just say that since DEC 2000, about 7 months, Im already close to 4 times your annual target on techs on a total portfolio basis, with most of it coming from my trading account not the mutual fund account.
I feel strongly that swing trading can be very profitable and much more profitable than buy and hold, but the key is that swing trading is NOT for everyone. Buy and hold strategy is more accomodating for the average investor.
The one obvious downside to swing trading is that I did not get anywhere close to the majority of the upswing during 1999. But in a normal market, swing trading can be much more profitable if done properly. Again, it aint for everyone. |
