The Stock Market, Investments, and Investing Thread
(09-07-2020, 02:47 PM)WombRaider Wrote: I don't understand why anyone tries to time the market. If any one of us could predict a pullback, a crash, etc., then 100,000 Wall Street traders and analysts could also predict it. And they could do it much more accurately than we could, with their state-of-the-art models and software. And yet, they can't predict the market. Overall, index funds consistently outperform actively managed funds.

I say put your money in index funds and don't mess with it. You take a beating every now and then, but in the long run that doesn't matter.

Yeah for sure. I've been putting in a steady amount into index funds for a few years now. In February I did cave in to the stress and sold everything at a good profit. This was when the market was right at the top, Covid was already a thing, and anyone who was paying attention could realise that it wasn't going to stay confined to China, but normieworld hadn't picked up yet. So I was flush with all this cash as everything was collapsing and others were selling at a loss, so I was feeling pretty good.

But of course as we saw the market recovered very quickly. Personally I've just been averaging my way back in, not in a particular hurry to buy everything back right away. But if I had just stayed put, my current standing would have been only marginally worse. The only way I would have profited from this hugely (in the short term...) is if I had re-invested everything by mid-March. Who would have thought of that beforehand? If anyone did I congratulate them. But tomorrow everything could go to shit again and then you'd have to consider whether to take action again, and you'd never have a sound night's sleep.

This form of investing does not conduct itself to buying and selling very often. Of course everyone knows this in theory, and it's easy to say this when most of your time in the market has been one big boom. But your nerves only get tested in practice by shit like this. So it's been a good experience for me. The trade itself wasn't that bad thanks to the timing of the sell. Better than anyone who sold at a loss because the world was ending and has had to scramble to get back in since then. But nothing worth the worrying. It was just the logical fallacy at work that anyone could warn you about: the idea that "Something is going on in the world, therefore I need to do something, I need to take some kind of action".

There's nothing wrong with re-evaluating occasionally, and selling at a nice profit if you roll that over into some other investment forms. But it seems pretty pointless to just stand there with a pile of cash that can't go anywhere except get ground down by inflation and zero-interest. Unless that pile is already big enough to retire on and live comfortably, but personally I'm nowhere near that, and in any case our tax and social system actively punishes that sort of thing. So I won't sell again just to cash some gains without a plan B.
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RE: The Stock Market, Investments, and Investing Thread - by Harem Scarem - 09-10-2020, 01:18 PM

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