Jim,
The "average" folks that have tried to trade, probably bought near the highs, and lost their shirts. The "average" investors with a buy & hold strategy had been buying before, and are probably still buying, averaging in. If you take a snapshot of the market on this date, that only includes the last three years, certainly your point looks valid. If I take a snapshot of March 1997 through March 2000, the opposite point is made. You need a longer term, investor time frame.
It's interesting that at the market top, trading as a strategy was dismissed as crazy, buy and hold was the only thing to do. Now that the market has had a record retreat, and buy and hold may make the most sense, it is the strategy that is slammed. People always think wrong at market tops and bottoms.
If you diversified between stocks, bonds and real estate, and if you averaged in, over the last 10 years you have probably done just fine. That's what investors do, that's what a good finacial planner recommends. The folks that got really damaged were the ones that bought the hype and speculated near the top. That's not investing.
re: Just being out of the market for 3 years outperformed it by what? 50%-80%.
Welcome to Monday morning, Mr. Quarterback. I don't remember anyone in March 2000 predicting what subsequently happened. Maybe you did, show me the post. I do remember you calling the end of the bear around Jan 2, 2001.
Random walk, there are just too many unknown variables in the ultra complex system that is the stock market.
John |
