Comments on: Do You Really Have To Know Anything To Make Money On The Stock Market?

By: StocksHaven dot com

StocksHaven dot com — Tue, 21 Apr 2009 12:55:05 +0000

Very interesting idea bout the ‘risk control’ concept. Well written article!

By: LinkStuff - Monday, April 20

LinkStuff - Monday, April 20 — Mon, 20 Apr 2009 09:02:20 +0000

[...] Blogger says you don’t have to know anything to make money on the stock market. This is true but you also don’t have to know anything to lose money [...]

By: Silicon Prairie

Silicon Prairie — Sat, 18 Apr 2009 16:10:23 +0000

You don’t need to leave the market completely – as The Four Pillars of Investing demonstrates, you can estimate when the future returns are likely to be lower. In this case you might want to consider reducing your allocation, just like if you were holding a stock fund that shifted to holding mostly bonds.

I first read this when I still believed that stock markets could return an average of 10%/year no matter what; it changed a lot at first, but fortunately the future prospects have improved quite a bit since then. A better example than the recent years is 10 years ago. You can always keep a bit of money invested in case it turns out that there is a good reason for the valuation, but every investment should be judged on the same basis of what you’re actually getting for it. If it’s not very much, you can’t expect people to keep paying more and more for it in the future.

By: The Financial Blogger

The Financial Blogger — Sat, 18 Apr 2009 12:25:28 +0000

Dorian,
can we lease this monkey? hahaha!

By: Dorian Wales @ The Personal Financier

Dorian Wales @ The Personal Financier — Sat, 18 Apr 2009 12:15:02 +0000

Good post. Reminds me of an online investing contest held by one of the financial sites in which “professional” brokers competed against each other and also against a “monkey” which was basically a computer that randomly chose investments. The monkey actually came in second….

Obviously in the short term everything is possible but I definitely agree that dollar cost averaging is one of the best investment strategies for households. Don’t be tempted to time the market.

By: The Financial Blogger

The Financial Blogger — Sat, 18 Apr 2009 01:30:13 +0000

Silicon Prairie,

the problem is as big in the first method in market timing than the second. In the recent years, when would you have left the market? in 2006 when Jarislowski started saying that it was going side ways? or in 2007 when everybody was expecting to get the oil barrel at $200 within 12 months? or early in 2008 while most people were saying it was only a “normal” correction of 10%? Or simply too late in 2008? Nobody knows when it’s the bottom or when it’s the peak… we only know a year after ;-0

By: Silicon Prairie

Silicon Prairie — Fri, 17 Apr 2009 19:12:00 +0000

There’s two kinds of market timing – avoiding losses because the market is going down now (I just saw a headline the other day saying mutual fund sales are down this year, causing many people to miss the rebound in the last month!) and avoiding losses because the market is going up and may come down eventually.

The second kind is more likely to be successful, although it has risks of its own. This kind of timing can help to adjust your asset allocation if you don’t want to buy and sell everything at once. Day-to-day trading is another matter – it’s hard to do unless you have a lot of time and a lot of money you’re ready to lose

By: Customers Revenge

Customers Revenge — Fri, 17 Apr 2009 13:23:20 +0000

I’m with you. Only “professional” or semi-pro investors should try to do much more than investing their money into index funds with some sort of allocation formula.