nedsaid wrote: ↑
Wed Oct 04, 2017 6:52 pm
avalpert wrote: ↑
Wed Oct 04, 2017 12:17 pm
nedsaid wrote: ↑
Wed Oct 04, 2017 11:57 am
The Wizard wrote: ↑
Tue Oct 03, 2017 2:16 pm
staythecourse wrote: ↑
Tue Oct 03, 2017 11:14 am
I am not sure why it seems to be SO HARD for folks to understand... YOU CAN NOT TIME THE MARKET!!...
Buy low, sell high.
That's all there is to it...
This made me laugh. I always thought buy low, sell high was pretty fundamental to success as an investor. It is amazing all the remarks how this is somehow market timing. I don't know, buy high and sell low? Is that supposed to work better. I like my buy low, sell high formula better.
'Buy low, sell high' is a trite throwaway line. Of course everyone wants to pay the least and sell for the most - the problem is it is only known in retrospect whether that is indeed what happens and you shouldn't conflate 'higher today than yesterday' with selling high.
Whether or not the market inherently 'cannot' be time, every attempt I have seen to specify 'buying on Really Bad Days' enough to actually test it has shown it isn't a means of more consistently buying high and selling low than vanilla rebalancing methods.
I don't know, you can say about anything is a trite throwaway line. "Stay the course." "Don't do something, just stand there." "Age in bonds."
Here's the difference between those (which have their own problems) and 'buy low, sell high'. Each of those is actionable, it directly implies a set of actions (or non-action I suppose) one can take whether it be telling you how much to hold in bonds or not, don't deviate from your plan or don't do anything at all.
'Buy low, sell high' provides no such actionable advice - unless you can tell me how you know when it is low or high. It is a mental shortcut to avoid having to specify and evaluate the proposed actions - and that is how it is often used. It's right up there with 'don't lose money' in terms of empty, useless 'advice' provided to investors.
Buy low, sell high is a pretty fundamental concept or at least I thought so. It implies looking for value, patience, and longer holding periods.
I think that is pretty laughable when you see it arose in the context of a 'strategy' to sell on a reactionary basis to daily movements with no reference to valuation at all.
So my advice for you is to buy high and sell low and see if that works better. No one advises that strategy though many investors do this in practice when they let emotions rather than reason drive their investments.
Yep, and trite lines like 'buy low, sell high' and 'never lose money' make it easier to tug on ones emotions and trip them up.
One could say that Bogleheadism is a collection of trite phrases. You just can't make everyone happy.
I highly disagree with this notion. The trite phrases are used to blur distinctions between 'boglehead' approach and various forms of market timing - not to clarify. When you resort to empty rhetoric you don't aid people in overcoming their emotions you provide marketers and salesmen the tools to hide the actual mechanisms underlying actions.
What makes the approach powerful is that it can be described simply and elegantly with resorting to tautologies, truisms and tag lines.