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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: GraceZ who wrote (15212)	12/2/2002 12:45:32 PM
From: Steve Lee	Read Replies (3) \| Respond to of 19219

"The only way the public can be on the side of positive expected return is to hold rather than trade" I disagree. I think that is the road to ruin. The vast majority of all public companies ever floated have gone bust. The stock market is a mechanism for extracting money from the general public and transferring it to the insiders and to the financial industry. Anyone who got rich thru LTBH got lucky. The statistics about average annualised return u see in financial services ads refer to the post 1982 period. They also are worked out from assuming you can match the indices. Index trackers don't match the indices. Apart from frictional costs, when the losers are thrown out of the index and replaced by stronger stocks, the trackers can't just replace them while keeping the portfolio value the same, they have to sell the losers for nothing, and buy the new expensive stocks. Indices just adjust the weightings and keep the level of the index the same. U could call it "magic" but "deception" would be a more accurate description. "There are times when an investor should not be involved in the market and should be sitting in cash. " Isn't that "trading"?