I made a big 250 dollars on my Barnes and Noble investment. I probably could have done 3 to 4 times that much, if I'd sold at the peak. But I stuck with it not because of the money but because I wanted to understand the timing of such things.
As far as I can tell, one has to be very far in advance of the upturns and downturns, for them to do you any good. But you have to sell pretty much immediately when there has been a dramatic change...
So I tried to learn from that small investment, and reacted to the news a few weeks ago by making a bigger move. As I mentioned, I took about half the available funds out of the stock market about 3 weeks ago.
It just didn't seem that there could possibly be any good news out of the debt negotiations. I thought there might be a Tarp like drop of 700 points when it got to within a couple days to the deadline.
Instead, over the three week period, including today, it went down about 700 points, little by little.
I went back into the market today, though I held about a third back into very safe, conservative, non-stock type investments.
By my calculations, I saved about 5% by pulling out when I did.
It's more than possible that the market will continue to drop for awhile, but I'm back in for the "long term" unless there is an equally obvious moment to "time" the market.
I mean, it seems so obvious to me that the market was going to go down -- and I was right. I know Timing the Market can't be counted on, but really...there are times when you absolutely should time the market.
Go back 3 weeks. Was there ANY chance there was going to be an easy solution? Did no one else hear the "Let It Burn" sentiment from the Tea Party? Was there not at least a small chance it could all crash?
Most importantly, what were the chances that the stock market would actually go UP over the last 3 weeks? I deemed the chances as pretty much zero.
Cash? I have the same cash I started with.
So why play with fire? Why wasn't this obvious?
Like I said. I'm believe truly that one probably shouldn't time the market.
Except, you know, when it's BLOODY OBVIOUS!!
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6 comments:
Um....maybe I should've waited until tomorrow...
There weren't significant changes made that actually address the debt problem and government's propensity to over spend. The market knows this and the rating agencies have been telling our "leaders" in DC to do something significant, not kick the can down the road. They might as well have defaulted now instead of in 6 months.
Turns out, because they were dealing with a new system, I will be starting tomorrow.
Heh.
Still borrowing 40c on the dollar which the market knows cannot be sustained. When that party ends, the economy will slow down further.
The above anonymous poster is wrong. The market is falling because we're going to try the "austerity" route in the middle of a recessionary period. Overall consumer demand remains weak as a result of deleveraging from the popping of the housing bubble.
Cutting government spending at a time like this is a fool's errand, and the market knows this.
In fact, the Republicans know this - that's why they pushed this so hard. It's the best chance they have to beat Obama in 2012. Austerity in the midst of weak overall demand => Weaker economy => One term president.
i posted the 2011 tax bill anybody read?
Hell no either did congress
everyone is selling all usa assets asap
its all going down because the ponzi is over
the only fool left is usa publik and they are broke
honestly nobody will miss the usa cop
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