What a difference a 100 days makes

[buynholdisdead]

@MarkR

No, that wasn’t my point, my point was that out of 500+ stocks, how can you reliably pick the 5 or 10 that will do very well? And even if you buy and sell and buy something else repeatedly, you could have easily bought Marmon, then it started going down and the chart said to sell, so you sold, but then you bought Stutz, it looked strong according to the charts, and it even went up 10%, but then suddenly dropped 40% and then another 40% and then to nearly zero very quickly.

If it dropped 40% you would still be in it? That is a big signal to get out. It already crashed through all your signals to sell. Sure, let’s say you really love the stock, you want to keep it forever. Well that isn’t a problem with the system it’s a problem with your emotions and Psychology. You just lost another 40 % because of your emotions.

@MarkR

The other big issue is that most people have trouble making decisions about money, and making multiple decisions is even more difficult. Deciding to get in, to get out, to get into something else, to get out, repeat … is tough. And it’s also time consuming. Most people will procrastinate drawing out those charts (I suppose online is much easier nowadays, but still they will procrastinate acting on them) and life would be so much easier for them to simply hold a low-cost index fund for 30-40 year while adding to it monthly, then retire, then continue to hold mostly index funds with a slightly higher allocation to fixed income to cover most regular expenses in retirement. Then when you die, all of it gets its basis stepped up. When you buy and sell constantly, you keep paying capital gains taxes … every year, until you die.

First of all you are talking how you would handle it not how I would handle it. I didn’t say it was for everyone and I didn’t say it didn’t have flaws. But nobody procrastinates drawing out charts. I showed you a few up board. It also isn’t time consuming 1 hour in the morning 1 hour in the evening. But if low cost index float your boat go for it. Just don’t expect better returns. You don’t pay capital gains in a roth IRA, 401k, or IRA.