The Motley Fool Discussion Boards
Investing/Strategies / Retirement Investing
|Subject: Re: S&P & SMA||Date: 5/4/2013 12:44 PM|
|Author: Rayvt||Number: 72185 of 82813|
OTOH, looking at the day to day charts, it seems it would be quite easy to miss the precise sell & buy points and significantly sway the results.
Nope. You don't have to be perfect, you only need to be Good Enough. The overall results are similar whether you do daily, weekly, or monthly. Daily is slightly the best, but has 4 times as many trades as weekly.
There's also the matter of taxes with all that buying and selling.
51 trades (25 round-trips) in 63 years isn't a lot of buying & selling.
Personally, I started moving out of stock funds at a measured pace in 2007. I've evolved my strategy into the following: ...
How does this backtest?
That's the problem, isn't it? You can't backtest this, so all you have is personal anecdotal data over a limited period of time in one phase of the market.
Humans are prone to a whole slew of cognitive biases & fallacies, and overweight narratives over actual data. There's been innumerable blog posts, papers, articles, and books written about these.
The major advantage I see is that I'm buying at lows and selling at highs
The major problem I see with this meta-statement is encapsulated in the concept of "Would you rather be right or rich?"
I wasn't going to toss in any quotes, but what the heck:
"By thinking it’s all about strategy, a trader can get way too involved with each individual trades outcome, whereas in reality the success of the strategy relies on the edge provided over a large number of trades."
Brian Lund, “The goal in trading is to make money, not to be a perfect trader.”
"Looking at portfolios, think deeply about process over outcome. If you do something the right way enough times, you’ll win.—-Dan Loeb"
Demosthenes (384-22 BC): “Nothing is easier than self-deceit. For what each man wishes, that he also believes to be true.” In other words, there’s a powerful tendency to believe that which could make one rich if it were true.
"The first principle is that you must not fool yourself—and you are the easiest person to fool." Richard Feynman
With respect to your remark: I did sell during the recent up swing of the market where I would have been better off holding.
"You can’t judge the correctness of a decision from the outcome. This is a concept that many people find nonsensical. But good decisions fail to work all the time – just as bad ones lead to success – simply because it is impossible to predict which alternate history will materialize."
|Copyright 1996-2017 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us|