I thought I’d have a little fun with a morning ritual The Business Insider runs each morning, with the same title as this blog piece. Here’s my take on what they’re saying:
“We’re in it for the long haul.”
“You can’t time the market.”
“We have to buy and hold.”
The tickers may change, but the banal story is the same. Not their fault entirely. They are poorly trained. And what would they do if they couldn’t get CNBC all day to kill the time? They are not money managers by a long shot.
You can see a 10% selloff in GLD btw, if it trades below $129.50 on size.
Gold has a few large holders , Paulson,Soros,Greenlight, just by themselves could trigger an avalanche when they decide to lighten up.
As for “you can’t beat buy and hold” via timing the market, Business Insider does not realize that trying to time the market is not for the purposes of “beating the market”. It’s to cut risk and take a piece out of the market without suffering through huge drawdowns. The greedy trader/investor usually are the ones who tout you “can’t beat the market” and they usually puke out at the bottoms with realized losses.
So the question for 90% of market participants is, Do you want 0-70% of a market move via a realized profit in your trading account
or
do you want 100% of a probable loss when you puke out near the lows?
Proper perspective on statistical averages of what you can realistically hope to take out of a trend will give you the answer. Do the homework or take a class.
Good comment Manuel! I would only retort that you have a 100% of NOT beating the market if you buy and hold, so I think there are a segment of traders out there who are trading to beat the market as well as to cut risk. If you manage to avoid the crippling 40%+ losses that a buy and holder suffers every few years, then you probably will beat the market anyway!
Michael, you might just be right on your 10% – I certainly hope so! I’m a buyer slightly above that, Jim Rogers stylie.