Even 2% down will be big fall ...5.5 % maybe bottom ...lol ...but surely not today
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Lets be honest, traders live for days like today. Pick the bottom before noon and brag about it by close of the day. Usually on small volume BECAUSE people prefer to buy and hold. Usually the bottom is in before the first 30 minutes with a couple of bounces before lunch, on your marks....
im being serious buy and hold only works long term if you time it right and buy the right stocks.
otherwise every single person in the world could just invest and be right and millionaires in time when in fact the opposite happens and most people enter retirement average to poor in wealth
I'm not really arguing with you on that. Entry and Exit do matter along with choice but a long term investor might not even look at their portfolio today. If you bought 50k of HGH last week maybe you want to look at it in 12 months time or maybe you might think buying OCA today could be looking good in 24 months. I started investing over 20 years ago and sold a few small wins but holding over time eclipsed those and proved them to be pointless mistakes. I get your good at trading, me not so much.
It is worrying everyone is still optimistic or bullish whilst inflation is still ridiculously high globally
Inflation falls .2% from the last report, yet that same inflation is compounding, just .2% slower, FED wants something to break and will increase rates until it does, not only that it also forces China to raise rates when they should be dropping them during their housing collapse, be safe *maybe* the worst hasn't arrived
We are in a war over currency & commodities, they don't care about your portfolio, the goal is to bring inflation to 2% and yet people are still borrowing and buying including our governments - Fixing inflation with inflation, brave bravo
"But, in fact, what you should learn when you make a mistake because you did not anticipate something is that the world is difficult to anticipate. That's the correct lesson to learn from surprises: that the world is surprising" - The Psychology of Money
Bull market cycles periods about 80% Bear Market cycles about 20% so Bear markets cycle periods aren't that common.. big crashes (usually but not always within the Bear Market cycle) are rare events but very commonly mentioned in media.
Most investors are passive investors (they have lives to live rather than being glued to a stock exchange monitor using various investment programmes)
..so...with passive investors being the dominate numbers in the market the best strategies are:..
Best Bull Market strategy is Buy and Hold and accumulate in the dips..As the stock market is in Bull mode most of the time Buy and Hold (Sailing) is very common investment behaviour.
Best Bear Market strategy is sell up and go away..The next best option is short term "in & out" (rowing) .. timing is the key factor and simple TA is the commonly used timing tool. I've been there and did that during the 2008 Bear Market cycle Staying "in" and being successful was bloody hard work, requiring constant monitoring, limited sleep, limited social life, stress and worry, high stock transaction costs with constant buying and selling, pissing Mrs Hoop off with big money transactions and various mood swings..Result: Good news I beat the market big time. My Portfolio went up +3% during the same time the overall market fell -40+%..Bad News: If I had exited the market and put my money on fixed term deposit I would have got +8% (interest) and had a life..
The worst Bear market investment strategy is the passive buy and hold..expect to lose on average what the market loses (average bear market loss ~-40%) and takes approximately 3 years to recover that Capital paper loss.
so this time guess where my money went?.. Yep in fixed deposit..I kept a small amount 10% for dabbling (as losing) in the market so to keep my finger on the pulse..I'm now playing the waiting game and as one might say I'm "locked and Loaded"
I admire your skills and honesty. There is one share I follow on the ASX and long time fan and regular poster of the company called bubble and sold out missing out on a sp that tripled. It's only double what he sold at now and he's still calling bubble. Timing the market is a gift but very few have it. Sell up and go away must have it's own levels of doubt? What if your wrong and it never drops enough or worse, you drop out to early or maybe today is the bottom and you bail only to see your shares recover?
Mike...With your finger on the sell button FOMO appears with all these positive maybes. Procrastination sets in and as the stock continues to fall in price and you become trapped and you face a dilemma and an unanswerable question of is it wrong to sell or wrong to hold on ..When finally the sell button is pushed FOMO is replaced with despair and has made you mistiming the sell. Often people sell near the bottom due to the procrastination and agony. Likewise when buying back in after a bear market event.
The Market place operates on sentiment (emotion) but I keep staying "Emotion Kills". One of the reasons I switched to TA discipline was TA investing removes that emotive factor and reduces investor dilemmas
How severe will this Bear Market Cycle be? How big a risk is it to stay fully invested in the market?
In my above post I used -40% capital loss as an average Bear Market cycle example to which you need a 67% rally to get that capital back to break even..Preserving Capital by keeping out for the few months when the Bear is at its worse can give you huge rewards when re-entering the market..
From the table you can see how destructive a Bear market can be..a severe Bear -60% has occurred a few times which needed a bull market cycle gain of +150% to recover back to even..severe events can take a long time to recover..
When everything was so rosy in the 1920's who would've believed the 3 year long 1930 bear of -90% was just around the corner...Have a look at the table, that-90% loss needed a +900% gain ..that's eye watering/jumping off buildings stuff ..eh
Amazingly after decades of TA and practicing pushing that big red button, the hardest thing in my investment life is still pushing that sell button..
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Thanks. I find it very hard to sell shares I like.