By "Putting nothing in precious metals" is not the bulk of the investing population market timing?
Few investors follow the best wisdom: buy and hold
Special to the Camera
"Don't try to buy at the bottom and sell at the top. That's only done by liars."
So said fabled Wall Street statesman Bernard Baruch, and it's as true today as ever.
Tens of thousands of investors follow market-timing systems, intended to get them into the market when stock prices are going up, and out again before stocks go down.
Sometimes people invent a system of their own. More often, they follow a newsletter writer or Internet guru. The gurus publish their best predictions, to "prove" how right they've been. (You rarely hear about the forecasts that were wrong.)
In theory, market timers ought to be out of business, after 16 years of the longest bull run in America's history. The mantra for most stock investors is "buy and hold."
Piles of historical data show that most market timers can't beat a strategy of buy and hold. Over the long run, you're better off holding an index mutual fund. Index funds follow the market as a whole. You earn what the market does, minus expenses.
But will you actually buy and hold? Probably not, says Mark Hulbert, editor of the Hulbert Financial Digest, which tracks the performance of investment newsletters.
In the next real bear market, he thinks you're likely to ride stocks down, panic when market conditions turn out to be worse than you expected, sell at the bottom and miss the next big bounce up....
bouldernews.com |
