Well, I am market timing... Wish me luck.

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Re: Well, I am market timing... Wish me luck.

Post by ignition » Fri Feb 14, 2020 5:40 am

Financologist wrote:
Thu Feb 13, 2020 11:47 pm
ignition wrote:
Fri Feb 07, 2020 2:26 pm
But the longer you hold them, the higher the likelihood of a profit right? I just never understand what people mean exactly with "stocks don't become less risky if held for a long time". I tried reading Zvi Bodie's paper for example but didn't understand it at all.
Perhaps there is a risk curve of some sort. To illustrate, is it riskier to hold the S&P 500 index for one week? Or 20 years? Depending on your definition of risk one could argue that a 20 year holding period poses greater risk of the index going to 0. World war or some other terrible fate is more likely to occur over a long period. History has shown us an ever increasing index value. If you plot in spaced enough intervals you may perceive little risk. The future may not be so kind to stock investors.
Yes, but if that happens the stock market will probably be the least of your worries. And bonds or cash probably won't save you in an end of the world scenario where the index goes to 0.

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