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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club

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To: Justa Werkenstiff who wrote (4033)3/21/1999 9:31:00 PM
From: MrGreenJeans  Read Replies (1) of 15132
 
Market Risk

This presents a dilemma. If one believes in regression to the mean based upon history, either the larger market catches up to the nifties or the the nifties fall back to the overall market. I believe the latter scenario is more likely but the question is when this will occur IMO. Tough call. Market in short term is unpredictable. If one does not believe the latter scenario will happen anytime soon or does not believe in it at all, one would continue to invest and trade for fear of losing out on profit opportunities.

I too tend to believe the latter scenario as well. And yes the call is a tough one. I tend to believe with interest rate increases on hold in the near term there will be opportunities to invest and trade. The question that is always present is: when is the time appropriate to take profits and leave the market to sidestep a bear market? IMO, when Greenspan warns the market that he may raise rates as a prelude to an increase in rates it will be too late. This is the market risk those with substantial amounts of money in the market must face. IMO, it is better to disengage earlier as opposed to later and leave the last dime on the table for others to fight over. As to when the disengagement should take place...I am at a loss. It will be a combination of an educated guess and good luck.
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