Need to read a random walk down wall street. Great book. The premise is no matter what news story hits the market, that information is already reflected in the stock price. Therefore, his theory is that you cannot out beat the market and it is in your best interest to dollar cost average a market tracker. That is investing. Myself I believe what you are describing is gambling.
The premise is no matter what news story hits the market, that information is already reflected in the stock price. Therefore, his theory is that you cannot out beat the market and it is in your best interest to dollar cost average a market tracker.
I have a single digit percent allocation of single company stocks I pick myself. They are very useful as a constant reminder at how bad I am at picking single stocks to encourage me to leave the majority of my investments in boring index funds I strictly buy-and-hold.
Haven’t read that book, but I’ve been very successful with the opposite approach. A favorable article about a company’s stock in popular mainstream media (not business publications) can push the stock up briefly over the next couple weeks based on false hopes of the clueless general public. Get in immediately, get out within a couple days if nothing happens, and within 2 weeks if it does. My other rule is only do this with options, not actual stocks. And yes, I too would call this gambling - but investing is never not gambling. It’s just more or less so depending on how you do it.
That is true investing is never not gambling but a lot of people use like their savings for what you would do and that’s the difference. Its like the casino, go into it with the amount of money you are willing to lose. If you can’t lose that money don’t go into the casino. Same principal with individual stock picks and options.
That’s an interesting game but it assumes the same amount either in or out all at once. Not what I’m describing where each month you invest a set amount into the market each time. This is what 401ks do. While the beat the couch is pretty cool it doesn’t take into account the dollar cost averaging aspect. It’s all in or all out. It’s not in, then buy more, then buy more, then buy more then buy more etc…you get the picture.
Having said that it is absolutely true that time in the market is better than timing the market.
Need to read a random walk down wall street. Great book. The premise is no matter what news story hits the market, that information is already reflected in the stock price. Therefore, his theory is that you cannot out beat the market and it is in your best interest to dollar cost average a market tracker. That is investing. Myself I believe what you are describing is gambling.
I have a single digit percent allocation of single company stocks I pick myself. They are very useful as a constant reminder at how bad I am at picking single stocks to encourage me to leave the majority of my investments in boring index funds I strictly buy-and-hold.
Great idea small amounts willing to lose.
Haven’t read that book, but I’ve been very successful with the opposite approach. A favorable article about a company’s stock in popular mainstream media (not business publications) can push the stock up briefly over the next couple weeks based on false hopes of the clueless general public. Get in immediately, get out within a couple days if nothing happens, and within 2 weeks if it does. My other rule is only do this with options, not actual stocks. And yes, I too would call this gambling - but investing is never not gambling. It’s just more or less so depending on how you do it.
That is true investing is never not gambling but a lot of people use like their savings for what you would do and that’s the difference. Its like the casino, go into it with the amount of money you are willing to lose. If you can’t lose that money don’t go into the casino. Same principal with individual stock picks and options.
Might want to check this out: Beat The Couch.
That’s an interesting game but it assumes the same amount either in or out all at once. Not what I’m describing where each month you invest a set amount into the market each time. This is what 401ks do. While the beat the couch is pretty cool it doesn’t take into account the dollar cost averaging aspect. It’s all in or all out. It’s not in, then buy more, then buy more, then buy more then buy more etc…you get the picture.
Having said that it is absolutely true that time in the market is better than timing the market.
I fully agree it’s not a complete stock market model, but I don’t think It claims to be.
I don’t remember it addressing what happened to dividends paid; are they just banked, reinvested, etc.
It’s certainly a cool tool