O
Odea
Guest
With the stock market falling over the past week due to a correction due in the market plus the terrorists attacks in Madrid I am wondering is it stupid to hold shares for the long term.
A
<A HREF=http://pub145.ezboard.com/baskaboutmoney.s
Guest
Nobody can say for sure but in general it is accepted wisdom that equities tend to deliver better returns than other asset classes (e.g. property, bonds, cash etc.) over the long term even in spite of volatility such as that exhibited by the markets in the light of last week's news. In general holding long term is also advisable since it minimises the eroding effects on gains of trading costs.
R
rainyday
Guest
I wouldn't say the market is 'falling over'. Remember for every seller, there is also a buyer, i.e. somebody who reckons it is well worth getting into the market at the current level.
A
<A HREF=http://pub145.ezboard.com/baskaboutmoney.s
Guest
I think Odea meant "what with the stock market falling, over the past week" as opposed to "what with the stock market falling over, the past week"!
O
Odea
Guest
Ticker.
Personally I think it best not to hold shares for too long. A friend of mine inherited Bank of Ireland shares about 100,000 pounds worth. I remember him telling me that he would never sell them. Yet he could have got 13.50 approx. for them in 2003 compared to 10.50 today. That's a drop of €3 per share approximately.
Another example is the UK share Kingfisher that announced a month or so ago a strong quarterly update. The shares rose on these figures/outlook. Today they announced their results and even though they were good the market didn't like them and the shares have dropped back.
All of the housebuilder shares in the UK rose today on the back of comments made by Gordon Brown in his budget. Before the budget CNBC had an article stating that he might do something to encourage housebuilding in the UK. If you were quick you could have nipped in and out and taken a profit. For example Wimpey up 30p, Bellway up over 40p etc If I were a holder of these shares I would think it foolish not to take a profit.
I think it is possible to look at individual sectors and when they are flavour of the month nip in and nip out taking a profit along the way.
Personally I think it best not to hold shares for too long. A friend of mine inherited Bank of Ireland shares about 100,000 pounds worth. I remember him telling me that he would never sell them. Yet he could have got 13.50 approx. for them in 2003 compared to 10.50 today. That's a drop of €3 per share approximately.
Another example is the UK share Kingfisher that announced a month or so ago a strong quarterly update. The shares rose on these figures/outlook. Today they announced their results and even though they were good the market didn't like them and the shares have dropped back.
All of the housebuilder shares in the UK rose today on the back of comments made by Gordon Brown in his budget. Before the budget CNBC had an article stating that he might do something to encourage housebuilding in the UK. If you were quick you could have nipped in and out and taken a profit. For example Wimpey up 30p, Bellway up over 40p etc If I were a holder of these shares I would think it foolish not to take a profit.
I think it is possible to look at individual sectors and when they are flavour of the month nip in and nip out taking a profit along the way.
R
rainyday
Guest
Re: Ticker.
Hi Odea - It's very easy to be wise with the benefit of hindsight. However, you really have no idea of the BOI/Kingfisher decisions you outline were the right decisions - because you don't know where those shares are going to go next week/month/year.
And it also raises the question of what you are going to do with the money once you sell. If you have a particular need to spend the money for a house/car/extension/whatever, then obviously selling out isn't a bad idea. But if you have no particular need for the money - what are you going to do with it? Leave it on deposit with inflation eating away at the value every month?
Hi Odea - It's very easy to be wise with the benefit of hindsight. However, you really have no idea of the BOI/Kingfisher decisions you outline were the right decisions - because you don't know where those shares are going to go next week/month/year.
And it also raises the question of what you are going to do with the money once you sell. If you have a particular need to spend the money for a house/car/extension/whatever, then obviously selling out isn't a bad idea. But if you have no particular need for the money - what are you going to do with it? Leave it on deposit with inflation eating away at the value every month?
S
Sceptic
Guest
Stocks always make money??
Excerpt from the Daily Reckoning Newsletter:
"Imagine that you do your maths (as they say in England)
and that you come to the realization that - as a scientific observation - stocks produce greater profits than bonds. If this were accepted as scientifically valid... it would be irrational for investors to put their money into anything other than stocks. Stocks would, then, rise dramatically - convincing even diehard skeptics, who would then buy stocks, too. Stocks would be hot... while bonds would cool down and ice over. Pretty soon, bonds would yield 10% or more (in 1978 you could get 15% from a U.S. government bond!)... and stocks would produce no yield at all... and no hope of capital gains, for all the world's money would be already invested in them.
"But the observation that stocks outperform bonds is based on investors' attitudes and reactions from a period when investors did not believe that stocks were better
investments. Stock prices from the period - much lower -
reflected the belief that stocks were, on the contrary, risky... and that investors needed a greater return to make up for the risk.
"And so it doesn't take long for the sharp, cynical
investor to see that the 'stocks are always better than
bonds' idea is flawed. The smart money pulls out of the
boiling stock market... just as Buffett, Soros, Rogers,
Templeton, and Grantham have largely done already. Later, the mob of lumpeninvestors catches on... and may, in a moment of sudden panic, realize that its goose has been cooked. Stocks crash. In effect, this generation of investors rediscovers the risk that their fathers and grandfathers always knew was there - the kind of risk that 'science' can't measure... the kind of risk the Feds can't protect you against."
Excerpt from the Daily Reckoning Newsletter:
"Imagine that you do your maths (as they say in England)
and that you come to the realization that - as a scientific observation - stocks produce greater profits than bonds. If this were accepted as scientifically valid... it would be irrational for investors to put their money into anything other than stocks. Stocks would, then, rise dramatically - convincing even diehard skeptics, who would then buy stocks, too. Stocks would be hot... while bonds would cool down and ice over. Pretty soon, bonds would yield 10% or more (in 1978 you could get 15% from a U.S. government bond!)... and stocks would produce no yield at all... and no hope of capital gains, for all the world's money would be already invested in them.
"But the observation that stocks outperform bonds is based on investors' attitudes and reactions from a period when investors did not believe that stocks were better
investments. Stock prices from the period - much lower -
reflected the belief that stocks were, on the contrary, risky... and that investors needed a greater return to make up for the risk.
"And so it doesn't take long for the sharp, cynical
investor to see that the 'stocks are always better than
bonds' idea is flawed. The smart money pulls out of the
boiling stock market... just as Buffett, Soros, Rogers,
Templeton, and Grantham have largely done already. Later, the mob of lumpeninvestors catches on... and may, in a moment of sudden panic, realize that its goose has been cooked. Stocks crash. In effect, this generation of investors rediscovers the risk that their fathers and grandfathers always knew was there - the kind of risk that 'science' can't measure... the kind of risk the Feds can't protect you against."
A
<A HREF=http://pub145.ezboard.com/baskaboutmoney.s
Guest
Re: Stocks always make money??
I don't think that anybody said that. On average, notwithstanding dips and crashes along the way, stocks have tended to outperform all other asset classes over the long term. This does not detract from the fact that some people do lose money on equities along the way. I'm not sure that the paradigm shift in relation to the equity markets implied by the above article has taken place to be honest.
In relation to trying to time the markets of apply specific investment strategies to stock selection and buy/sell decisions this article is useful:
www.arachnoid.com/stocks/index.html
I don't think that anybody said that. On average, notwithstanding dips and crashes along the way, stocks have tended to outperform all other asset classes over the long term. This does not detract from the fact that some people do lose money on equities along the way. I'm not sure that the paradigm shift in relation to the equity markets implied by the above article has taken place to be honest.
In relation to trying to time the markets of apply specific investment strategies to stock selection and buy/sell decisions this article is useful:
www.arachnoid.com/stocks/index.html
O
Odea
Guest
Can we help ourselves to make money.
Interestingly enough the construction shares that rose yesterday are down today, no doubt some profit taking. Happy enough to take a profit.
This year we have the US presidential election and Olympic games, should we be investing in shares that will be involved in the advertising and media industry?
If we have a hot summer as well as the Olympic games should we be investing in the beer and alcohol shares. Traditionally when we have a hot summer, shares in pubs and clubs generally do poorly. If we have a poor summer should we invest in the pubs/clubs shares?
What I am trying to say is, is it possible to predict sectors that will perform well?
Interestingly enough the construction shares that rose yesterday are down today, no doubt some profit taking. Happy enough to take a profit.
This year we have the US presidential election and Olympic games, should we be investing in shares that will be involved in the advertising and media industry?
If we have a hot summer as well as the Olympic games should we be investing in the beer and alcohol shares. Traditionally when we have a hot summer, shares in pubs and clubs generally do poorly. If we have a poor summer should we invest in the pubs/clubs shares?
What I am trying to say is, is it possible to predict sectors that will perform well?
A
<A HREF=http://pub145.ezboard.com/baskaboutmoney.s
Guest
Re: Can we help ourselves to make money.
No. Timing the market is a mug's game.
No. Timing the market is a mug's game.
O
Odea
Guest
Let's try and time the market then.
I'm making money doing it. If I were allowed I would list a half dozen shares that I think will make you money over the next two months. How about a friendly competition?
I'm making money doing it. If I were allowed I would list a half dozen shares that I think will make you money over the next two months. How about a friendly competition?
A
<A HREF=http://pub145.ezboard.com/baskaboutmoney.s
Guest
Re: Let's try and time the market then.
I'm not saying that nobody EVER makes money predicting the future but nobody can do it with any accuracy. When it comes to attempting to predict future events the law of averages applies. Apart from the fact that stock tipping isn't allowed I personally am not really interested in wasting my time trying to disprove a hypothesis that is statistically sound to be honest.
I'm not saying that nobody EVER makes money predicting the future but nobody can do it with any accuracy. When it comes to attempting to predict future events the law of averages applies. Apart from the fact that stock tipping isn't allowed I personally am not really interested in wasting my time trying to disprove a hypothesis that is statistically sound to be honest.
O
Odea
Guest
Pseudo moderator.
Who said anything about wasting your time? I was thinking about the wider AAM audience. There are other people besides you O, who might be interested and who might not agree with your views. It would be interesting if we could with the help of sound financial analysis, reasoning, logic, sentiment etc, bend the laws of averages in our favour.
Who said anything about wasting your time? I was thinking about the wider AAM audience. There are other people besides you O, who might be interested and who might not agree with your views. It would be interesting if we could with the help of sound financial analysis, reasoning, logic, sentiment etc, bend the laws of averages in our favour.
A
<A HREF=http://pub145.ezboard.com/baskaboutmoney.s
Guest
Re: Pseudo moderator.
That's why I said "I personally"... :rolleyes
That's why I said "I personally"... :rolleyes
S
soylentgreenISpeople
Guest
Dice.
I would imagine that the laws of averages come in to effect when throwing dice or similar. The outcome cannot be influenced.
However if a person is investing in shares using sound fundamentals, research and all the other tools available to help them, then it is possible to trade successfully and to move the odds in your favour.
I don't think the laws of averages come in to this unless you are picking your shares using a pin.
I would imagine that the laws of averages come in to effect when throwing dice or similar. The outcome cannot be influenced.
However if a person is investing in shares using sound fundamentals, research and all the other tools available to help them, then it is possible to trade successfully and to move the odds in your favour.
I don't think the laws of averages come in to this unless you are picking your shares using a pin.
R
rainyday
Guest
Re: Dice.
How come many fund managers lose money during market downturns then, given the great tools/technology/research that is available to help them in their stock picking?
A
<A HREF=http://pub145.ezboard.com/baskaboutmoney.s
Guest
P
piggy
Guest
Re: Dice.
"How come many fund managers lose money during market downturns then, given the great tools/technology/research that is available to help them in their stock picking?"
A lot of people think that these people don't use sound fundamental tools when picking stocks in the first place which is why you should never give your money to one of them to invest on your behalf.
"How come many fund managers lose money during market downturns then, given the great tools/technology/research that is available to help them in their stock picking?"
A lot of people think that these people don't use sound fundamental tools when picking stocks in the first place which is why you should never give your money to one of them to invest on your behalf.
A
<A HREF=http://pub145.ezboard.com/baskaboutmoney.s
Guest
Re: Dice.
While I would agree that fund managers, with all their fundamental analysis and technical strategising, can no better predict the future than you or I, I would not go so far as to say that one should NEVER hand one's money over to them for investment purposes. For various reasons some people may find indirect equity investment preferential to direct equity investment and, as such, a unit linked fund with reasonable charges - whether managed or index tracking - may well be a suitable choice.
While I would agree that fund managers, with all their fundamental analysis and technical strategising, can no better predict the future than you or I, I would not go so far as to say that one should NEVER hand one's money over to them for investment purposes. For various reasons some people may find indirect equity investment preferential to direct equity investment and, as such, a unit linked fund with reasonable charges - whether managed or index tracking - may well be a suitable choice.
P
piggy
Guest
Re: Dice.
"For various reasons some people may find indirect equity investment preferential to direct equity investment and, as such, a unit linked fund with reasonable charges - whether managed or index tracking - may well be a suitable choice"
Yes, that's a fair point 0. I tend to dislike fund managers myself so perhaps I'm a little bias about this.
"For various reasons some people may find indirect equity investment preferential to direct equity investment and, as such, a unit linked fund with reasonable charges - whether managed or index tracking - may well be a suitable choice"
Yes, that's a fair point 0. I tend to dislike fund managers myself so perhaps I'm a little bias about this.