No. of Recommendations: 1

These are the bond trades I did yesterday:

Issue YTM If B&H Achieved YTM from Trading
JCP’s 7.950’s of ’17 8.8% 15.3%
JCP’s 6.375’s of ’36 8.9% 30.2%
Dell’s 5.400’s of ’40 6.9% 28.5%

Earlier in the week, I did the following:

Issue		         YTM If B&H        Achieved YTM from Trading 
JCP’s 7.125’s of ’23 9.3% 242.4%

A belief in Buy-and-Hold is responsible for destroying more wealth than trading ever did. Yet trading is regarded as ‘risky’. The mistake most self-identified investors make is to confuse ‘volatility’ with ‘risk’. They can’t manage the latter. So they try to avoid the former, and they make tiny money that is then doubly-taxed, once by the enforcement arm of the Treasury Dept (the IRS), and then a second time by the Fed's shenanigans (i.e., currency depreciation). The net-result is that it takes an 8% return just to break even with respect to preserving one's purchasing-power.

But Dalbar's 20-year studies of investor results document that the "average" stock investor doesn't achieve even half of that. What they are buying --when they buy stocks or funds -- is just a social club membership. Worse, TMF is committed to encouraging that foolishness, because it profits from selling subscriptions to their "advisory services".

Is the solution to the so-called "retirement crisis" to give "investors" the tools they need to make profitable financial decisions? "No", say those who train traders. "The undisciplined can be given a tested, proven trading system, and they will still lose money. They didn't build the system. Therefore, they don't trust it, and they won't follow its rules." It's a Catch-22 situation. Them that can, trade for their own account. Them that can't, believe it shouldn't be attempted. Results reflect intentions, and most investors fail to pull more money out of markets --on an after-taxes, after-inflation basis-- than they bring to them.

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