my annual lessons the markets taught series, part 1

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larryswedroe
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Location: St Louis MO

my annual lessons the markets taught series, part 1

Post by larryswedroe » Mon Jan 23, 2017 8:10 am

rest will appear Wed and Friday

Hope you find it helpful

http://www.etf.com/sections/index-inves ... 016-part-1

Next week will cover my final review of 2016 sure things and present 2017s

Best wishes

Larry

Dasnyc
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Re: my annual lessons the markets taught series, part 1

Post by Dasnyc » Mon Jan 23, 2017 8:45 am

We can all benefit from these lessons. At one time or another, I'm sure that many of us have violated these basic rules of successful investing. Thanks for the reminders!!

Thank you also for your many valuable contributions to this site. I am not wealthy, but what little success I have had in my investments have been due to the advice and information that is freely shared here.

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jmndu99
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Re: my annual lessons the markets taught series, part 1

Post by jmndu99 » Mon Jan 23, 2017 8:59 am

Thank you Mr. Swedroe.

Lesson 2 really drove home the notion that "time in the market" is more important than timing the market.

Lesson 3 reminded me that, during the beginning of the year market did nothing really exciting (my opinion), I continued to add to my pot, during the events that caused volatility. This effectively brings me to lesson 2.

Best wishes,
J.

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dwickenh
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Re: my annual lessons the markets taught series, part 1

Post by dwickenh » Mon Jan 23, 2017 9:08 am

Great reminders during a time when the media is professing turmoil.

Dan
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett

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CULater
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Re: my annual lessons the markets taught series, part 1

Post by CULater » Mon Jan 23, 2017 6:10 pm

So true about #3. It is the unexpected events that drive markets. The problem is that they are a surprise that you weren't ready for, and the other problem is that even if you were among the minority who are ready, you don't know whether those events will drive the market up or down. For example, with regard to the election there were people like me who anticipated the surprise outcome; but most of those people (like me) bet the wrong way on it's effect (fortunately,it was a small "side bet"). You have to be right two out of two, and only lucky gamblers are.
On the internet, nobody knows you're a dog.

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FIREchief
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Re: my annual lessons the markets taught series, part 1

Post by FIREchief » Mon Jan 23, 2017 7:50 pm

Short synopsis: Buy and hold passively managed, low cost index funds. No new lessons here! :sharebeer
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

Wakefield1
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Re: my annual lessons the markets taught series, part 1

Post by Wakefield1 » Tue Jan 24, 2017 10:35 am

Corrections are caused by market timers trying to anticipate the correction? :shock:

boglephreak
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Re: my annual lessons the markets taught series, part 1

Post by boglephreak » Tue Jan 24, 2017 7:47 pm

i like seeing these kinds of facts.
These types of results are not at all unusual, For instance, the study “Black Swans and Market Timing: How Not To Generate Alpha,” which covered the 107-year period ending in 2006, found that the best 100 days (out of more than 29,000) accounted for virtually all (99.7%) of returns.

Here’s another example. There are 1,020 months in the 85-year period from 1926 through 2010. The best 85 months, an average of just one month a year (or just 8.3% of the months), provided an average return of 10.7%. The remaining 935 months (or 91.7% of the months) produced virtually no return (just 0.05%).

kaudrey
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Re: my annual lessons the markets taught series, part 1

Post by kaudrey » Wed Jan 25, 2017 3:29 pm

Thanks, Larry - very interesting, as always!

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