Welcome new reader!

Financial news I consider important, with my opinion, which is worth as much as you paid for it.
Please click HERE to read a synopsis of my view of the financial situation.

Thursday, June 25, 2009

Buy and holding stocks equals lower returns

Back on October 7th 2008, I posted a market timing indicator for investing that I recommend for "long term" investors to use. It is pretty simple way of determining when it is a good time to invest in the US stock market.

Mish of the Global Economic Trend Analysis blog wrote an excellent article that painfully details two main points.

1) Buy and hold of stocks does worse than fixed interest.
2) Using bond interest rates as a guide, long term investors can detect when to exit the stock market.

If you are a buy and hold investor, I urge you to click on the link above or here and read Mish's article fully. Also I urge you to click on my October 7th 2008 post and read the video from Karl the market ticker.

Both of these blogger give free advice that is better than just about any financial adviser you could pay for. May I also remind you that Mish works as a financial adviser. I updated my "when to buy and hold" stock link to the right of this blog for future readers.

Also, Warren Buffett stated the economy still in 'shambles'. With all due respect, I do not trust Mr. Buffett anymore for financial advice. For someone of his stature to state something as negative as this, it is worth the consideration.

If you are still caught long, I expect S & P 500 to hit a low below 450 before this is over. It isn't too late to exit out. And if you "must" be long a stock, precious metal miners or natural resource stocks I expect to gain value quicker than other stocks.

No comments:

Post a Comment