Show Posts
Yeah, but hindsight is also 20/20. I'm pretty sure (haven't done the hard maths, and probably won't cause it's the weekend) that if you start from the premise that you'll trade successfully only 50% of the time, buy and hold is a much better approach in the long run than trying to play the market swings.
That's also what I thought for a long time... until I read both Goomboo's journal and this (from Technical Analysis of Stock Trends - 9th Edition):
Quote
As may be seen in the following table, replacing the table from Chapter 5,
the Dow Theory continued to provide its user an advantage over the
unaware Buy-and-Hold Investor. From its original investment of $100 in
1897 the Theory investment would have grown to $345,781.94 by December
31, 2005, with the long trade still open. The table below shows the details,
including the post-2000 bust drawdown. To my mind this table is a powerful
demonstration of the power of methodical technical investing.
By contrast, the investment of $100, if bought at the low, 29.64, and sold at
the historic high, 11762.71, in January 2000 would have grown to $39,685.03.
the Dow Theory continued to provide its user an advantage over the
unaware Buy-and-Hold Investor. From its original investment of $100 in
1897 the Theory investment would have grown to $345,781.94 by December
31, 2005, with the long trade still open. The table below shows the details,
including the post-2000 bust drawdown. To my mind this table is a powerful
demonstration of the power of methodical technical investing.
By contrast, the investment of $100, if bought at the low, 29.64, and sold at
the historic high, 11762.71, in January 2000 would have grown to $39,685.03.
